In a report released by global payments and financial platform Airwallex, and travel research company Skift, the travel industry is also being challenged by shifting payment preferences since the Covid-19 pandemic.
While revenue from cross-border payments is on the rise, the report stated that the unprecedented diversity of payment methods in different markets complicates transactions for 70% of travel companies.
In a statement, Airwallex co-founder and CEO Jack Zhang stated that as global travel continues to surge, travel companies increasingly rely on quick and seamless cross-border payments to surpass customer expectations at every touchpoint.
“However, our latest study shows that slow and outdated payment processes are increasing the cost of moving money internationally, which is eating into their profits – modest at the best of times.
“Modernising their financial operations with a unified and scalable payment solution will be critical to reducing the cost and friction associated with managing cross-border transactions,” he said.
He said for smaller players, this levels the playing field, enabling them to compete with larger and more established counterparts.
The findings provided a unique perspective on the financial challenges and opportunities that companies face as they grow and operate on a global scale.
It offered a rare insight into the issues travel businesses experience with end-to-end payments and financial operations, especially with the growing trend of cross-border transactions.
The report further showed that travel customer payment preferences are shifting, with local payment methods being increasingly used.
“Despite credit cards, debit cards and digital wallets remaining the most common customer payment methods, travellers are increasingly using local payment methods or peer-to-peer payment apps, which can vary widely by market.
“In addition, cross-border transactions are soaring, bringing significant global payment challenges,” it said.
Nearly 40% of travel executives reported that half of their revenues came from international customer payments.
“Inefficient payment systems are detrimental to profits, with 90% of travel executives prioritising financial operational upgrades,” said the report.
Airwallex and Skift surveyed 473 travel executives in April this year across seven global markets including Australia, China, Hong Kong SAR, Singapore, the UK, and the US.
The survey respondents confirmed that they make decisions about payment processes and financial operations for a travel company across the sector including online travel bookings, travel operators, tours and activities, and destination management.