Airline and Travel Booking Payment Processing: How Airlines and OTAs Accept Payments Without Disruption

If you are a travel business that handles high volumes of high-ticket or card-not-present bookings, this article will be more useful to you.

The following travel business types will find this article more useful to them:

• Airlines that wish to directly sell their flights
• OTAs that wish to sell flights from a variety of airlines
• Travel agencies that wish to sell flights to their customers
• Tour operators that wish to offer travel packages to their customers
• Platforms that use NDC to book flights for their customers
• Companies that offer flight changes and modifications
• Companies that compare airline booking merchant account solutions
• Merchants that are searching for an airline bookings merchant account
• Any travel business that deals with chargebacks and payment reconciliations with their customers

If payment disruptions would prevent travelers from booking or your team from reconciling sales, your merchant account and gateway setup needs to match travel operations.

Travel businesses rarely need one payment method. They need the right mix of cards, wallets, bank payments, local methods and merchant-account structures for each market and booking channel.

The right setup depends on who owns the booking, who is merchant of record, when the ticket is issued, how refunds are handled and how payment data flows back into the booking system.

Provider fit depends on the business model. A direct airline, OTA, travel agency, tour operator and booking platform may all need different combinations of acquiring, orchestration, gateway control and travel-specific settlement workflows.

Payment Nerds is usually the strongest fit when a travel business wants help comparing merchant account structure, underwriting, gateway compatibility, chargeback risk and processor fit. Airline-specific platforms and orchestration providers may be more effective when the airline already has a mature technical payments team and needs to optimize across regions and channels.

The Visa Acquirer Monitoring Program (VAMP) is a fraud and dispute monitoring program. The VAMP ratio is the number of companies that received fraud and non-fraud dispute reports divided by the total number of settled Visa transactions. TC40 is the number of companies that received fraud reports from Visa, and TC15 is the number of companies that received dispute or chargeback reports from Visa.

For airlines and OTAs, Visa has created the VAMP program because travel is a card-not-present transaction with the potential for fraud and cancellation of travel arrangements. Airlines and OTAs may introduce risk to these transactions through actual fraud, friendly fraud, refund-related fraud, delivery of the service after the ticket is sold, and poor documentation of the charge dispute.

An additional component of the Visa Acquirer Monitoring Program is enumeration monitoring. Enumeration monitoring detects enumeration attacks, in which bots attempt to test credit cards on airline and OTA websites. The enumeration ratio is the number of instances of enumeration attacks divided by the total number of authorization attempts on a website. VAAI (Visa Account Attack Intelligence) is the score assigned to websites to detect enumeration attacks. Scores of Standard and Excessive indicate potential enumeration attacks that may result in fees for those companies.

For airlines and OTAs, a strong VAMP program may require robust data systems that can link payment data to booking data in chargeback cases. Information that may be necessary to effectively respond to a chargeback includes the booking reference, traveler information, the itinerary and travel details, the terms of the ticket sale, the authorization records for the ticket, the ticketing status, the refund status, and any communications with the customer.

Start with payment ownership. Does your airline sell its flights directly, or do you work with OTAs, airline agencies, or travel platforms that accept bookings from end customers? Each of these entities has different technological and financial requirements for its payment systems.

Then compare approval support, gateway compatibility, payment orchestration, refund controls, local payment methods, fraud tools, 3DS support, PCI scope, and reporting requirements. The best airline payment processing solutions should minimize disruptions to the airline booking experience.

Airline payment costs involve card processing rates, payment gateway fees, orchestration fees, cross-border costs, foreign exchange costs, chargeback fees, fraud detection and prevention tools, 3D security authentication costs, PCI compliance costs, tokenization costs, settlement and reporting costs, and integration development costs.

Reserves may be required with payment processing companies for travel merchants due to the nature of the business. Airline tickets are purchased today for flights that occur months from now. Should there be a problem with these flights after purchase, the payment processing company may be required to cover those costs for the airline.

The biggest mistake is treating airline and OTA payment processing like ordinary ecommerce. You need specific features and integrations to handle booking, refund, settlement, and dispute documentation with travel suppliers.

Another mistake is choosing a payment solution that offers a lower rate but has a higher risk of payment disapproval or disruption with travelers. When selecting travel payment software and gateways, consider both the cost and the potential disruptions that each could cause to your airline.