Five ways payments orchestration is transforming travel 

The global travel and tourism industry contributes more than 10% of global GDP according to the World Travel and Tourism Council and it powers cross-border movement at record levels. Yet for airlines, travel agencies, and hotels — getting paid is still harder than it should be.

Legacy payment stacks, fragmented providers, the proliferation of payment methods, and rising cross-border costs are all part of the picture. While consumer expectations have adapted to modern payment methods like digital wallets, much of the industry’s payment infrastructure hasn’t evolved quickly enough.

That’s why more travel companies are turning to payments orchestration. Rather than connecting to payments providers manually, a payment orchestration platform acts as a smart layer that connects and optimizes payments across multiple providers and regions, allowing the merchant to manage everything from one place.

Initially, payments platforms were about providing connectivity to different acquirers, fraud providers and payment methods across the world to reduce the integration burden and simplify how travel companies manage payments. But things have moved on.

Introducing orchestration on top of the platform is all about optimizing each payment in terms of cost, performance, risk and experience, so travel companies can decide how each transaction should be handled, and which payments partners are best placed to support it.

Here are five ways orchestration is transforming travel payments, and why orchestration is the number one subject at industry conferences.

Payments are a critical part of the traveler experience. A slow or broken checkout can lose a sale in seconds, whether online or on trip, while not offering travelers the choice to pay with their preferred or local payment options can prevent travel firms from expanding to new regions.

Centralized payment management

Travel companies run highly specialized systems that make global payment operations more complex than most other industries. In particular, airlines and hotels tend to have older payments stacks, sometimes built in house, that are difficult to update, slow to adapt, and hard to maintain.

Gaining a single view of the payments set-up is often impossible with data received from multiple providers, in different formats that must be brought together before any meaningful insight can be gained. Making changes to this kind of payments set-up is hard, both functionally and commercially, as the travel company needs to deal with different providers.

With payments orchestration, all of this can be managed in one place. Instead of managing dozens of separate integrations, travel companies can unify payment data in dashboards, correct inefficiencies, manage partners centrally, and make real-time changes via a single interface.

This opens the door to a more sophisticated understanding of how payments are performing. For example, if acceptance rates in a region have fallen, the travel company can spot this quickly and drill down into the root cause through the central management platform.

With a central view of a complex global payments set-up it’s also possible to adjust the rules that govern how the company accepts payments in one place. For example, the travel company might choose to reduce its risk by applying Strong Customer Authentication more broadly or adjust its rules to prioritize cost effective acceptance.

Integration of multiple providers

Relying on a single PSP in a region can limit flexibility and increase risk for travel companies. If that provider underperforms, or goes down altogether, it can seriously impact conversion and revenue. Yet building and maintaining multiple PSP relationships manually is operationally tough, especially for global businesses.

Multi-provider payment orchestration makes it easy to plug in and switch between multiple acquirers and PSPs. At Outpayce we’re taking this concept to the next level with the recent introduction of the travel industry’s first payments marketplace.

With a marketplace, a travel company can access information about the providers on the platform in terms of their volumes and average performance when serving existing travel companies. This makes it easier to choose the right partner. Through an API-first approach we’re also making it easier for partners to connect into the travel industry, providing greater choice and faster deployment for travel brands.

Ultimately, with a marketplace model, travel companies can bring a new level of insight into supplier performance. The orchestration is based on huge volumes of real transaction data, so companies can better predict the anticipated costs and acceptance rates of each provider. This means better orchestration decisions are made, and the customer experience is better as their payment is more likely to be accepted.

This model is already being adopted at scale. More than 100 airlines have moved to modular payment architectures supported by APIs through Outpayce. This signals a clear shift in the industry towards taking a more flexible approach, rather than trying to stitch a payments set-up together in-house. In a complex, cross-border industry like travel, the simplification benefits of a platform approach can be hugely significant.

Improved customer experience

Payments are a critical part of the traveler experience. A slow or broken checkout can lose a sale in seconds, whether online or on trip, while not offering travelers the choice to pay with their preferred or local payment options can prevent travel firms from expanding to new regions.

Payment orchestration for travel gives companies the ability to offer a localized experience at scale—supporting alternative payment methods, currencies, and languages, all based on where the traveler is and how they want to pay. In short, orchestration can help the industry keep up with the pace of change

That’s exactly what Malaysia Airlines was aiming for when it implemented our Xchange Payments Platform. By expanding local payment options and using orchestration to route transactions to higher-performing acquirers, the airline reduced payment errors by 8% – a direct improvement in customer experience and revenue capture.

Orchestration also helps travel companies adapt to regional preferences quickly. In regions where wallets or bank transfers are preferred over cards, they can activate new options fast, without major development lifts or new integrations. And if a payment method turns out not to be popular, it’s straightforward to turn it off again.

Optimizing for cost, revenue and risk

Payments are a significant cost of doing business in travel, often representing two two to three percentage points of a travel company’s overall revenue. Orchestration can help to control these costs, but there are many more variables in the chain.

Having a better view of each payment provider means they can be chosen based on a detailed understanding of their real-world performance. Take a high value, first class ticket from a frequent flyer. In this case, acceptance and security are the most important factors. Ensuring you select the best providers is what this new frontier of orchestration is about, so the best decisions can be made.

Using dynamic rules, companies can route payments to the provider with the most favorable terms. The same goes for cross-border payments. Orchestration lets companies work with multiple local acquirers to dynamically select the one offering the best rate and speed for local processing of a given transaction. This means companies can protect margins while also giving customers the option to pay in their own currency.

At Outpayce, our deep roots in the travel industry means our orchestration platform can help travel companies optimize for revenue, cost and risk because it understands the underlying nature of the purchase.

For example, if a payment relates to a long-haul, first-class booking it’s important the airline can accept it effectively. In this scenario, perhaps the airline is happy to pay slightly more to route the payment via its premium partners.

Data can yield similar insights about the risk of a transaction too. For example, if the transaction is going to involve a Strong Customer Authentication check, then perhaps it doesn’t make sense to apply fraud screening as well.

Essentially, this smart routing approach enables travel companies to consider the whole ‘end-to-end’ picture of each payment, from risk to reconciliation, to acceptance rates to cost, and even the underlying nature of the purchase. This is how the industry can ensure its payments decisions are fully optimized.

Fraud prevention & enhanced security

Travel companies deal with a high volume of fraud risk, from loyalty abuse to stolen cards, frequent refunds, and chargeback disputes. Without proper tools, that risk either eats into revenue or creates so much friction that customers abandon the process.

With orchestration, fraud prevention becomes part of the architecture. A modern orchestration platform for payments can plug into multiple fraud prevention providers, tokenize sensitive data, and apply intelligent rules in real time. This doesn’t require hardcoding or long integrations.

For example, companies can automatically trigger 3DS on high-risk transactions, apply different rules for different regions, or use tokenization to reduce PCI exposure and offer one-click repeat bookings.

In orchestration platforms, this level of customization is baked in. Travel companies can create risk strategies that match their business model without compromising on experience.

The road ahead

The travel industry now has access to a mature and highly capable network of payments providers across the world, and smart payment orchestrators that help to realize the full value. This is already helping the industry deliver the basics more efficiently, connecting to the partners they need to meet traveler payment expectations around the world. What is the next step? Perhaps it is applying advanced data intelligence to support smart routing to ensure that network is harnessed in the most effective way possible.

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