The Infrastructure Nobody Wanted to Talk About
For decades, the payment layer in travel was treated the way airlines treat their aging reservation systems: functional enough to leave alone, too embedded to easily replace. Cards settled transactions. BSP reconciled agency payments to airlines. Everyone moved on.
The problem is that this infrastructure was built for a distribution model that is actively being dismantled, and the friction it generates is no longer invisible.
The BSP, or Billing and Settlement Plan, developed by International Air Transport Association, was designed for a world where IATA-accredited travel agents sold tickets on behalf of airlines through standardized fares. That world still exists, but it now coexists uneasily with one where airlines want to sell ancillaries, personalized bundles, and dynamic offers that the BSP was never designed to handle.
The result is a growing mismatch between what airlines want to sell and what the payment infrastructure can settle.
Why the Card Network Is No Longer Enough
Cards solved one problem elegantly. They gave buyers a universal credit instrument and gave sellers a near-guaranteed settlement. But that convenience comes at a cost the travel industry has absorbed quietly for years.
Interchange fees on card transactions average between 1.5% and 3%. In travel, where margins are thin and transaction values are high, that cost compounds quickly. An airline processing 10 billion dollars in card revenue annually may be handing over more than 200 million dollars to card networks before accounting for other operational costs.
Beyond cost, cards carry structural limitations specific to travel. Chargebacks are disproportionately high, particularly in airline bookings where disruptions, cancellations, and refund disputes are common. Virtual cards, widely adopted by online travel agencies, mitigate some risks but introduce reconciliation complexity. They are a workaround rather than a structural solution.
Airlines such as Lufthansa Group and Air France-KLM, both pushing forward with retailing and NDC strategies, are increasingly encountering these limitations as they attempt to align payments with modern distribution models.
The NDC Shift and the Payment Gap It Exposed
The airline industry’s push toward NDC and direct distribution has made the payment problem impossible to ignore.
When a ticket is sold through a direct channel or an NDC connection, the transaction often sits outside the BSP framework. That shifts responsibility for settlement, reconciliation, and risk management back to the airline or its partners. In effect, airlines pursuing retailing are discovering that their payment infrastructure is lagging behind their commercial ambitions.
This gap has created an opportunity for fintech players to step in. Companies offering payment orchestration, real-time settlement, and account-to-account capabilities are positioning themselves not as processors, but as part of the distribution infrastructure itself.
That distinction matters. A provider that can deliver real-time settlement visibility, travel-specific fraud management, and multi-currency reconciliation across channels is no longer just handling payments. It is influencing how travel is sold.
Payments Are Becoming a Strategic Layer
As distribution evolves, payments are moving closer to the core of the transaction.
The connection between offer, order, and payment is becoming more tightly integrated. Airlines are no longer simply publishing fares. They are managing dynamic offers, bundling services, and personalizing experiences. Payments play a direct role in whether those offers convert and how profitable they are.
Control over the payment layer allows airlines to influence customer behavior, optimize costs, and improve cash flow. It also provides access to valuable data that can inform pricing, fraud prevention, and personalization strategies.
In this context, payments are no longer a back-office function. They are a strategic lever within airline distribution.
Who Controls the Money Flow Controls the Market
One of the least discussed implications of this shift is control.
In traditional models, control was fragmented. Airlines relied on BSP for agency sales, card networks for settlement, and intermediaries for distribution. No single player owned the full transaction lifecycle.
That is beginning to change. As airlines move toward direct distribution and NDC-enabled channels, they are regaining visibility over how money moves. This is not just about reducing costs. It is about controlling data, managing risk, and shaping the customer experience at the point of sale.
At the same time, new dependencies are emerging. Fintech providers offering orchestration and embedded payment capabilities are positioning themselves as critical infrastructure. The industry is not simply removing intermediaries. It is reshaping them.
The Fragmentation of Payment Models
There is no single replacement for cards or BSP. Instead, the industry is entering a phase of fragmentation.
Pay-by-bank solutions are gaining traction, particularly in Europe, offering lower costs and faster settlement. Real-time payment systems in markets such as India and Brazil are setting new expectations for speed and transparency. Virtual cards continue to dominate OTA transactions, while embedded finance enables deeper integration of payments into travel platforms.
The result is a multi-layered ecosystem where different payment methods coexist depending on geography, channel, and customer profile.
The challenge for airlines and travel sellers is orchestration. Selecting, managing, and optimizing payment methods across markets is becoming a core capability rather than a technical afterthought.
Fintech Is Redefining the Payment Layer
Fintech companies are accelerating this transformation.
Platforms such as Stripe and Adyen allow travel companies to dynamically route payments, improve authorization rates, and gain real-time visibility into transaction performance. Travel-focused providers like CellPoint Digital are building solutions specifically designed for airline retailing, including multi-currency settlement and alternative payment integration.
In a sector defined by cross-border, high-value transactions, these capabilities directly impact profitability and customer experience.
However, the growing role of fintech also raises strategic questions. As airlines and intermediaries rely more on external platforms, the balance of control shifts again. Payments are becoming too central to be treated as a purely outsourced function.
Intermediaries Face a New Payment Reality
For travel agencies, OTAs, and aggregators, the evolution of payments introduces both opportunity and pressure.
Payments have historically been a source of revenue through commissions, markups, and financial float. New models, particularly direct settlement and account-to-account payments, challenge these structures.
At the same time, intermediaries must adapt to increasing complexity. Supporting multiple payment methods across markets adds operational burden, while airlines push for greater control over transaction flows.
The role of intermediaries is not disappearing, but it is being reshaped. Their relevance will increasingly depend on their ability to integrate and optimize payment strategies alongside distribution capabilities.
Regional Dynamics and the African Opportunity
The evolution of travel payments is not uniform.
In Europe, open banking frameworks are accelerating pay-by-bank adoption. In Asia, mobile wallets and real-time payments are already embedded in daily transactions.
In Africa, the landscape is distinct. Mobile money ecosystems are deeply entrenched, often surpassing traditional banking infrastructure. Markets such as Kenya and Tanzania demonstrate how alternative payment systems can scale at national level.
For travel companies, this presents a unique opportunity. Rather than adapting global models, they can build payment strategies around existing local infrastructure. In some respects, these markets are not behind but ahead, offering a glimpse of how global travel payments may evolve.
A Structural Shift, Not a Technical Upgrade
The transition beyond cards and BSP is not simply a technical evolution. It is a structural shift in how value moves through the travel ecosystem.
Over the next few years, the industry is likely to operate across multiple payment rails simultaneously. BSP will continue to serve legacy agency flows. Cards will remain dominant in international transactions. At the same time, alternative payment methods, real-time systems, and embedded finance will expand their role.
The winners will not be those who adopt a single solution, but those who can orchestrate complexity effectively.
The next phase of airline distribution will not be defined solely by how travel is sold, but by how it is paid for. In that equation, payments are no longer infrastructure. They are leverage.
