NDC Broke the Ticketing Stack. Payments Are Still Catching Up.

Airlines won the distribution war. The settlement infrastructure wasn’t ready for what comes next.

For the better part of a decade, the airline industry’s defining strategic battle was over offer control. Who builds the fare? Who owns the content? Who decides what the traveler sees?

NDC was the answer airlines gave to those questions. By most measures, it worked.

Airlines have progressively reclaimed the offer layer from GDS intermediaries. Direct and NDC-enabled channels now account for a growing and strategically significant share of bookings at carriers that invested seriously in the transition.

But offer control was only the first hill. The harder terrain is payments. The industry is only beginning to understand how poorly equipped it is to compete there.

NDC did not just change how offers are created. It broke the tight coupling that held the traditional distribution model together.

In the EDIFACT-BSP world, pricing, ticketing, settlement, and payment moved along a single, well-understood rail. The GDS was the authoritative record. BSP and ARC handled clearing. Disputes followed a known chain of custody. The system was slow and expensive, but it was coherent.

NDC fractured that coherence. As airlines began distributing differentiated offers through APIs, outside the GDS, transactions also moved outside the settlement infrastructure the industry had spent fifty years building. BSP did not evolve to handle dynamic pricing at scale. ARC was never designed for ancillary-heavy, continuously priced itineraries. Airline PSSs, in most cases, were not built to act as the system of record for a high-volume, API-driven, multiparty payment environment.

The result is a payment layer that is fragmented, inconsistently reconciled, and increasingly difficult to operate at scale.

The complexity goes well beyond the proliferation of payment methods. Airlines now process transactions across credit cards, virtual cards, buy-now-pay-later products, mobile wallets, account-to-account transfers, and, in many markets, mobile money. Each comes with different authorization logic, settlement timing, refund mechanics, and fraud exposure. None map cleanly to the BSP model.

Then comes ancillary retailing, one of NDC’s core promises. Every seat, bag, or bundle sold outside the base fare creates a separate financial event. It may settle differently, refund differently, and sit in a different system. When an itinerary changes or a disruption hits, the financial unwind quickly outpaces the tools built to manage it.

Refunds and exchanges are now the clearest operational stress test. In the legacy model, the GDS held the booking record and the rules were standardized. Under NDC, the airline owns the order, the rules are airline-specific, and intermediaries such as OTAs and TMCs sit between proprietary airline systems and their own accounting environments, often without a clean bridge between them.

Fraud is quietly becoming a structural issue as well. Direct and API-driven distribution has expanded the attack surface. Early NDC implementations have shown vulnerability to card testing and payment abuse. The legacy indirect channel had more built-in resistance due to embedded authentication layers. Many airlines moved fast on NDC. Not all moved fast enough on fraud infrastructure.

The gap has not gone unnoticed. Airlines are moving first. Those that invested heavily in direct distribution understand that owning the payment relationship is the natural extension of owning the offer. That means building payment orchestration capabilities, integrating alternative payment methods natively, and designing settlement flows around their own commercial logic. Some large carriers are already operating payment stacks more sophisticated than many expected airlines would ever build.

GDSs are repositioning. Having lost ground on offer creation, they are reframing their role around order management and settlement, the infrastructure layer that connects airline content, agent workflows, and financial clearing. Whether that position holds depends on one critical question: will airlines accept a continued GDS role in the financial flow of NDC transactions? That answer is still open.

Payment orchestration platforms and travel-focused fintechs are meanwhile moving quickly into the gap. They are not replacing BSP. They are inserting themselves between the airline and the payment method, managing routing, currency conversion, fraud, and reconciliation as a service. For airlines that do not want to build this in-house, they offer speed and flexibility. They also introduce a new dependency.

Nowhere is this shift more visible, or more urgent, than in emerging markets. In Africa, where card penetration remains low and mobile money is often the dominant financial layer, the NDC payment challenge looks fundamentally different from Frankfurt or Singapore. Mobile money is not an edge case. It is the default, and airlines that want to capture NDC-driven demand in these markets need to integrate with ecosystems that were never part of the traditional airline payment stack. Most have not done so at scale.

Settlement adds another layer of complexity. Multi-currency environments, capital controls, and limited real-time clearing infrastructure create reconciliation challenges that global payment platforms were not designed to handle. Airlines are caught between a global NDC strategy built on mature payment assumptions and local markets where those assumptions do not hold.

And yet, this is where the opportunity lies. Markets without deep legacy infrastructure have the ability to leapfrog. They can adopt real-time payments, mobile money integration, and API-native settlement models without unwinding decades of BSP dependency.

The distribution war produced visible winners and losers. The payments battle will be quieter and more consequential. This is where margin lives. Airlines that treat payments as back-end infrastructure will fall behind those that treat it as a strategic control point. Owning the payment layer means cleaner economics, better fraud control, and the ability to extend into financial services over time.

For OTAs and TMCs, the pressure is already building. Settlement complexity is increasing, standardization is lagging, and margins are tightening further. Survival will depend on investing in payment and reconciliation capabilities, not waiting for airlines to solve the problem upstream.

For GDSs, the window is narrowing. For new payment players, this is the opening. Payments were never supposed to be the battleground. But in airline distribution, they are quickly becoming the layer that decides who actually wins.