Booking a trip should be exciting – not stressful. But too often, the payments that make the travel industry tick are anything but smooth. Travellers wait weeks for refunds, smaller hotels struggle with delayed settlements, and providers lose margin to card fees. In fact, the airline industry spends over $20 billion a year on payment costs, amounting to 3% of the industry’s total revenue.
Add to this fraud risks, hidden costs, and clunky cross-border payments, and it’s clear: how we pay for travel hasn’t kept up with how we travel. The good news is that a better system is already here: instant payments.
Powered by open banking, solutions such as Brite Instant Payments are transforming how money moves across the travel industry, both from customer to merchant and merchant to customer. From airlines and OTAs to boutique hotels and tour operators, canny merchants are cutting costs, reducing fraud, and creating the frictionless payment experience travellers have long been waiting for.
In this article, we’ll explore the biggest problems with traditional travel payments – and how instant payments are fixing them.
Topics we will cover include:
- Why travel payments are broken
- How instant payments are fixing travel payments
- The future of travel payments
Why travel payments are broken
The travel industry is one of the most payment-heavy sectors in the world. From airline tickets and hotel reservations to tour bookings and refunds, millions of transactions flow through every day.
But the systems behind those payments are far from smooth:
- Refunds take weeks
- High card fees eat into margins
- Fraud and chargebacks are costly
- Delayed settlements hurt cash flow
- Payments are complex for travellers
- Multi-currency payments are challenging
The good news? Instant payments are here to solve these issues.
How instant payments are fixing travel payments
Powered by open banking, instant payments directly connect banks and businesses, cutting out unnecessary intermediaries. The result is faster, cheaper, and more secure transactions that improve travel providers’ operations and deliver smoother experiences for customers.
Here’s how instant payments are solving these issues in practice:
Refunds that take weeks
When plans change—flights get cancelled, hotels are overbooked, or guests simply adjust their itineraries—refunds can often take days or even weeks to process. Needless to say, this frustrates travellers and erodes trust in the booking platform or provider.
The solution: Instant refunds
Instant payments enable refunds in seconds, returning money to travellers’ bank accounts. Faster refunds mean less stress for customers – and fewer calls to customer service.
Example: With Brite Instant Payments, a hotel can send a refund directly to a guest’s bank account within seconds. There is no waiting, no stress, just trust restored instantly.
High card fees eat into margins
Airlines, OTAs, and hotels process thousands of bookings daily, with each card transaction costing between 1% and 3%. On a €500 booking, that’s up to €15 lost. It may not sound like much, but this drains margins and limits competitiveness across millions of bookings.
The solution: Lower fees, higher margins
Account-to-account (A2A) payments bypass card networks (such as those provided by Brite Instant Payments) and drastically cut fees. Providers using Brite Instant Payments benefit from lower fees and faster settlement, unlocking operational savings that can be reinvested into lower fares or better customer experiences.
Example: An OTA like Booking.com could save millions annually while offering customers more competitive pricing.
Read more: Travel Payments Unlocked for Airlines.
Fraud and chargebacks
Travel is one of the most fraud-prone industries, with stolen cards often used to buy high-value tickets. Chargebacks are costly and time-consuming for providers and can even result in genuine customers losing their bookings.
The solution: Built-in fraud prevention
Instant payments that conform to the latest PSD3 regulations use strong customer authentication (SCA) as standard. This can include authentication such as fingerprint or face recognition via the customer’s banking app. This makes it more difficult to commit fraud and, in turn, significantly reduces chargebacks.
Delayed settlements and cash flow strain
Smaller hotels and independent operators may wait days for card transactions to settle, leaving them with little liquidity to cover suppliers, payroll, or essential upgrades.
The solution: Real-time cash flow and smoother reconciliation
With instant payment solutions like Brite, funds settle instantly, giving smaller providers real-time liquidity and reducing reliance on costly short-term financing. Thanks to Brite’s unique network of banks, businesses gain real-time visibility into finances and greater freedom to invest in operations.
Complex, frustrating payment processes
Travellers booking across borders often face hidden fees, unclear exchange rates, and clunky payment processes. Some cards don’t even work abroad, adding stress to an already frustrating process.
The solution: Simpler payments
With instant bank payments, travellers can pay directly from their account with a few taps. There are no middlemen, fewer fees, and less uncertainty – the payment process is familiar, quick, and secure.
Multi-currency challenges
Cross-border bookings often mean delays, conversion costs, and confusion for travellers and providers.
The solution: Seamless multi-currency payments
Paired with FX services, instant payments allow travellers to pay in their home currency while providers receive funds in theirs – it’s seamless and cost-effective.
Example: A guest in London books a Paris hotel room in pounds, while the hotel instantly receives the payment in euros. Both sides enjoy a smooth, transparent transaction.
The future of travel payments
Travel is all about creating smooth, memorable experiences. Payments have often been the part that slows everything down – but that’s beginning to change. Instant payments are no longer just a ‘nice-to-have’; they’re rapidly becoming the expectation.
As adoption of open banking grows across Europe and beyond, instant payments will be woven more deeply into the travel experience. We’ll see:
- Refunds processed before a customer even hangs up the phone
- Hotels and airlines making faster decisions and offering better service, all enabled by real-time visibility of their cash flow
- Travellers booking, paying, and getting refunded in their own currency with just a few taps – no hidden fees, no waiting, and no uncertainty
In the coming years, payments won’t just be a background process: they’ll become a competitive advantage. Providers who embrace instant payments will gain happier customers, lower costs, and stronger loyalty. Those who stick with outdated systems risk being left behind.
The perfect travel payment solution isn’t in the distant future. It’s already here with solutions like Brite Instant Payments – instant, seamless, and built to move at the speed of modern travel.
Conclusion
Travel should be about unforgettable experiences, not frustrating payment headaches. The old systems of slow refunds, high fees, and security risks have long held the industry back, creating friction for businesses and customers. However, as this article has shown, the solution is already here. Instant payments are not just a temporary fix; they are the future of a more efficient, secure, and customer-centric travel industry.
By moving money at the speed of modern travel, solutions like Brite’s Instant A2A Payments allow providers to cut costs, reduce fraud, and gain a real-time view of their finances. At the same time, they give travellers the frictionless experience they have come to expect – with instant refunds, secure payments, and no more hidden fees.
Providers who embrace this technology will gain a significant competitive edge, building stronger loyalty and creating a smoother journey for everyone. The question is no longer whether instant payments will transform travel but how quickly you will choose to adopt them.
If you would like to learn more about how you can improve your payment systems with Brite, contact our payment experts today.
