The travel industry has experienced a resurgence following the pandemic, with more people booking flights, hotels, and rental cars online. However, the adoption of digital payment solutions remains slow due to the industry’s complex infrastructure. Many transactions still rely on a combination of digital and legacy systems, making it difficult for businesses to streamline payments. Companies are working to improve the payment experience, ensuring that travelers can make purchases efficiently while businesses manage transactions effectively.
Efforts to modernize travel payments have been ongoing, but the industry continues to face obstacles in achieving full digital integration. Unlike e-commerce platforms that provide seamless payment options, travel-related transactions involve multiple stakeholders, including airlines, hotels, and travel agents, each using different systems. Previous attempts to simplify these operations have encountered challenges due to regulatory requirements, currency exchanges, and vendor coordination. The current push for an improved payments ecosystem reflects the industry’s ongoing struggle to meet consumer expectations.
How Do Legacy Systems Complicate Travel Payments?
The existing travel payment infrastructure involves multiple touchpoints, from booking systems to back-office reconciliation. Payments flow through different platforms, requiring coordination among vendors, currency exchange mechanisms, and compliance with regional regulations. Legacy systems, which have been in use for decades, often lack the flexibility needed to support modern digital payments, making it difficult for companies to introduce new payment options efficiently.
Businesses in the travel sector aim to provide a more intuitive and user-friendly payment experience. Consumers expect a process similar to online shopping, where transactions are straightforward, and refunds can be processed quickly. However, travel payments often involve additional complexities, such as partial refunds and cancellations, which require robust backend systems to manage funds effectively. Payment orchestration platforms have emerged to address these challenges by integrating various payment methods and enhancing transaction efficiency.
What Role Do Payment Orchestrators Play?
Payment orchestration platforms, such as CellPoint Digital, aim to optimize transactions by connecting various payment systems through APIs. These platforms help businesses manage payment flows, reducing inefficiencies and ensuring a smoother experience for travelers. By automating reconciliation and settlement processes, payment orchestrators minimize delays and improve financial transparency within the travel industry.
Kristian Gjerding, co-founder and CEO of CellPoint Digital, highlighted the importance of simplifying travel payments, stating:
“The need for simplification has grown as the complexities of the travel ecosystem have exploded.”
The platform focuses on creating a seamless payment experience, allowing businesses to navigate evolving consumer expectations while addressing operational challenges.
The International Air Transport Association (IATA) has also been working on refining the payment process by introducing a bundled approach that simplifies transactions. This initiative aims to provide a structured payment system that aligns with modern consumer expectations. However, implementing such changes across the travel industry requires collaboration among airlines, hotels, and payment providers.
Gjerding further explained the role of technology in managing refunds, stating:
“Having systems that are able to translate rules, block or issue partial recompense, and even determine whether a refund is possible … is essential.”
These advancements are expected to improve refund processing times and enhance customer satisfaction.
The travel industry continues to seek solutions that balance operational efficiency with consumer convenience. While payment orchestration platforms are helping businesses streamline transactions, the transition to a fully digital-native experience remains a long-term objective. Companies must navigate regulatory constraints, technological limitations, and market demands to achieve a cohesive payment infrastructure. As the industry evolves, integrating digital payment solutions will be essential for improving customer experiences and optimizing financial processes.
