Booking travel online is easy for customers – a few clicks and it’s done. But for online travel agencies (OTAs), handling the payments behind the scenes is anything but simple. From managing suppliers across the globe to dealing with fraud risks and currency exchange, the payment side of the travel industry is filled with hurdles. This article breaks down the most common OTA payment challenges and offers clear ways to deal with them.
An overview of the travel distribution value chain
Travel distribution is made up of several steps and parties between the customer and the service provider. It starts when a customer makes a booking through your OTA platform. That request is passed along to suppliers such as airlines, hotels, and tour operators who provide the actual service.
It wasn’t always this complicated. In the past, people called a travel agent, the agent rang up the supplier, and the payment followed a fairly direct path. But now, the digital setup has added a few more steps. There are extra layers of platforms and providers in between, each one adding something useful – but also making the flow of payments harder to manage.
As the OTA, you’re right in the middle of it all. You’re the marketplace, the connector, and often the one handling the money. Customers trust you to take their payment and deliver the trip they’ve booked. Meanwhile, you’re managing a long list of suppliers, each with their own way of doing things and their own timelines for getting paid.
And then there’s the customer side. People want instant confirmations, easy payment options, and everything to work smoothly across phones, tablets, and laptops. To meet those expectations, you need the kind of payment setup that can keep up. It has to process transactions in real time, keep things secure, and stay compliant with different rules depending on where your users and suppliers are based.
Further Reading: The Ultimate Guide to Virtual Card Solutions for Travel Companies
Typical payment challenges faced by OTAs
Payment challenges in travel are messy by nature. Each transaction touches multiple parties, currencies, and time zones, leaving plenty of room for delays and errors.
OTAs operate across different markets, each with its own rules and requirements. What works in one country may be restricted in another, and customer expectations vary from place to place. Keeping everything consistent is hard work.
At the same time, growing competition pushes OTAs to offer more flexible payment terms. Options like buy now, pay later appeal to travellers but add more risk and admin for your team. Technology moves quickly, but payment systems often fall behind. Integrating new methods takes time, and many OTAs are stuck with tools that can’t keep pace.
Challenge 1: Cash flow issues
Cash flow kills more OTA businesses than anything else. And it usually comes down to timing. Customers pay you today for something they’ll use months from now. Meanwhile, suppliers want their cut almost immediately.
Take hotels, for example. Most expect to be paid within 30 days of booking, even if the guest won’t arrive for another five months. So if someone books a Christmas trip in July, you’ll probably be settling that invoice by August. The trouble is, you might not charge the customer until closer to the travel date. That’s a long time to cover the gap with your own money.
Airlines are even tougher. Many require payment within 24 to 48 hours of booking confirmation. A customer buys a flight on Monday, the airline wants its money by Wednesday, but your payment processor might not settle the funds into your account until Friday. That leaves you out of pocket for days on every single booking.
Then there are corporate clients. Big companies often negotiate 60 to 90-day payment terms, yet still want instant booking confirmations. In other words, you’re acting as a short-term lender, covering the costs upfront while waiting months to get paid.
Here’s what makes cash flow so unpredictable in this industry:
- Suppliers expect fast payment, often long before the customer travels
- Corporates take their time to pay, but expect zero delays
- Peak seasons demand heavy supplier spending before customer funds arrive
- Currency swings can shrink your profit between booking and settlement
Spring is a perfect example. Bookings flood in for summer holidays, and suppliers want their share right away. But customers might not be charged until June or July. If you don’t have enough buffer in the bank, you could run out of cash before peak season even begins.
And when multiple currencies come into play, things get even more complicated. You may quote a price in pounds, settle with the supplier in euros, and find out weeks later that the exchange rate has moved against you. What looked like a solid margin can quietly turn into a loss.
Challenge 2: Fraudulent payments
Fraud is one of the biggest threats OTAs deal with. High booking values, long gaps between purchase and travel, and global transactions give fraudsters plenty of room to operate. And they’re no longer relying on just stolen cards. Their methods are getting more creative.
Here’s what makes fraud so common in this space:
- Credit card fraud. Stolen card details are used to book trips that can be resold quickly.
- Identity theft. Fake accounts are built using real personal data and used to place large bookings that appear legitimate.
- Friendly fraud. A customer completes their trip, then disputes the charge, and claims they never made the booking.
- Account takeovers. Criminals access real user accounts and make bookings using saved payment details.
- Chargeback abuse. Some customers take advantage of the fact that travel companies often lose disputes due to weak documentation or language issues.
Fraud is harder to spot in the travel industry. Customers often live in one country, book in another, and travel to a third. This makes it difficult to rely on location-based checks or standard fraud detection tools that work well in other sectors.
Further Reading: Virtual Card Fraud Prevention: How Secure Are They?
Challenge 3: Insufficient guidance, support, and innovation
Most payment providers build their tools for standard online shops, not for travel. OTAs deal with bookings that include multiple suppliers, currencies, and timelines. Generic systems don’t account for that, and support is often slow or missing when it matters most.
Few providers offer 24/7 assistance from people who understand how travel payments actually work. When issues come up during busy periods, waiting for answers can mean lost bookings and angry customers.
The technology side isn’t much better. While other sectors add new payment features regularly, OTAs often struggle to find anything that suits their setup.
Common weak spots include:
- Integration. Most APIs are too basic. They don’t cover how payments should flow between OTAs, customers, and suppliers.
- Documentation. Many guides skip over real-world travel use cases and leave out key details.
- Training. New teams are left guessing how to manage payments and often repeat the same costly mistakes.
- Regulatory help. It’s rare to find a provider that can explain requirements across all the countries you work with.
Without proper tools and support, OTAs are forced to waste time patching things together instead of focusing on serving their customers.
Challenge 4: The outsourcing of card processing
Outsourcing card processing can solve short-term capacity issues, but it often creates long-term problems. You hand over a critical part of your operation to someone else and lose visibility, flexibility, and control in the process. During peak booking periods, payment timing becomes unpredictable. External providers may not prioritise your traffic, and delays in processing mean delays in confirming bookings. That leads to dropped sales and frustrated customers.
Working with multiple providers adds technical friction. Each one uses different APIs, data structures, and settlement rules. Trying to maintain a consistent payment flow across several systems becomes time-consuming and error-prone. Costs are harder to track. Many outsourcing agreements come with vague pricing models. Between fixed fees, variable markups, and settlement charges, it’s easy to lose track of what you’re actually paying.
If a provider goes down or changes its terms, you’re left exposed. And when things go wrong, it’s your reputation on the line – not theirs.
Challenge 5: Foreign currency payments to travel suppliers
Paying suppliers in other countries sounds routine, but it often turns into a slow, expensive, and unpredictable process. One of the biggest challenges is the exchange rate. A customer pays in pounds, but the supplier wants dollars or euros. By the time the payment is made, the rate has shifted. What looked like a decent profit can shrink or disappear entirely. Most OTAs don’t have proper tools to manage that risk, and few can afford the costs of hedging.
International transfers themselves are another problem. They usually pass through multiple banks, each adding a fee and slowing things down. A payment that should take hours might take several days to clear, especially when different time zones, banking holidays, or compliance checks get in the way.
On top of that, holding accounts in multiple currencies isn’t cheap. The setup takes time, and every region has its own requirements. What works in one market might not work in another, forcing teams to spend time untangling rules that change country by country. Regulatory pressure makes it worse. Anti-money laundering checks, foreign exchange controls, and reporting rules vary widely. A process that’s compliant in one jurisdiction might raise red flags in another, delaying or even blocking the transfer.
And when suppliers don’t get paid on time, bookings get held up. Some may cancel altogether. Others might stop working with you. Payment reliability is part of the service OTAs offer, and when it breaks down, trust does too.
“Double-loop” OTA payment problems
OTAs handle two separate payment cycles at once: one for collecting money from customers, the other for settling with suppliers. These flows rarely align. Each follows a different schedule, uses different systems, and carries its own set of risks. Keeping both sides in sync is harder than it looks, especially when volume increases or anything unexpected happens.
Customer payments can stretch across weeks or even months. It starts with a booking and may continue through pre-authorisation, final capture, a refund, or a dispute. A single booking might trigger several transactions, all with different timestamps. Supplier payments, meanwhile, follow their own path. Some expect to be paid immediately, others send monthly invoices, and certain bookings involve staged payments tied to service delivery. These two timelines often clash.
The real risk is what happens when one side slips. A failed card payment can delay your ability to pay the supplier. If a supplier misses a confirmation, the customer may cancel, forcing you to refund money you haven’t even received yet. One small delay can trigger a chain reaction.
Tracking everything manually doesn’t work at scale. Matching customer payments to supplier obligations across currencies, platforms, and timeframes requires structure, not guesswork. And when you’re forced to pay a supplier before collecting from the customer, your cash flow suffers. That gap, if not managed properly, can quietly grow into a serious financial problem.
OTAs’ payment challenges with legacy solutions
Many OTAs still rely on outdated payment systems that can’t handle the complexity of modern travel. These platforms slow things down, block integration with better tools, and introduce risks that grow with scale. Yet despite the obvious limitations, they remain in place because replacing them often feels more difficult than keeping them alive.
Integration is one of the biggest problems. Older systems usually lack API support or use outdated formats that don’t connect easily with newer tools. Instead of improving your setup, you’re stuck building custom workarounds, which are slow to develop and fragile in practice. Even small upgrades become complicated when everything depends on a system that can’t keep up.
Performance is another constant concern. What works fine under normal conditions often fails under pressure. During peak booking periods, transaction volumes rise sharply, and older systems begin to show their limits. Processing slows down, errors increase, and customer experience takes a hit right when demand is highest.
Then there’s the Cost. Legacy systems increase costs, slow down operations, and block improvements. Most OTAs keep using them because switching feels risky, even when the system clearly fails to meet current needs. You need people who still understand how they work, and that knowledge is getting harder to find. Meanwhile, modern platforms offer more functionality at lower long-term cost, but switching feels risky. Many OTAs stay locked into outdated tools simply because the thought of migration feels like too much at once.
Security doesn’t help the case for keeping them. Older systems often lack support for current standards and need constant patching just to stay compliant. Each gap becomes a potential entry point for fraud or data breaches, especially as threat patterns shift.
The longer these systems stay in place, the more they hold you back. They increase overhead, limit your ability to adapt, and make growth harder than it needs to be. The longer it stays in place, the more damage it does. It adds pressure to the team, limits what you can build, and turns small updates into full-scale problems.
Automated Clearing House (ACH)
ACH payments are cheap and reliable for some use cases, but they often don’t match what OTAs actually need. The biggest issue is timing. ACH works in batches, not in real time, which means payments take longer to clear. When a supplier expects confirmation within hours, waiting one to three business days can break the booking.
Delays create pressure on cash flow, especially when supplier terms are tight. If you need to settle quickly but funds are still moving through the system, that gap has to be covered. And if a payment fails, you may not even know until the next processing window closes. By then, it may already be too late to fix the issue without damaging the booking or the supplier relationship.
ACH is also limited to domestic transfers. For OTAs working with international suppliers, it usually isn’t an option. Hotels, airlines, and tour operators based abroad expect faster, more flexible settlement methods that ACH can’t support.
Physical Debit and Credit Cards
Using physical cards for travel payments adds layers of complexity that OTAs don’t always have time to manage. Whether you’re supporting corporate clients or handling internal bookings, issuing and tracking plastic cards slows things down.
Distributing cards is a process on its own. You need to manage shipping, activation, PIN setup, and replacements. Any delay affects how quickly clients or staff can start using them, which adds friction in time-sensitive booking situations.
Tracking expenses is another challenge. When payments happen across different currencies and time zones, standard card statements often miss the detail needed to reconcile costs. That creates more work later, especially when teams need clear records for reporting or policy compliance.
Security is always a concern. Physical cards can be lost, stolen, or misused. Managing access across multiple cardholders takes constant monitoring, and the tools required to do that properly aren’t always easy to set up.
Further Reading: Virtual Cards vs. Physical Cards: What’s Better for Business?
Billing and Settlement Plan (BSP)
BSP systems are common in airline payments, but they often come with constraints that make things harder for OTAs. The structure is rigid, the entry requirements are high, and managing the process can take time and resources.
Getting into the system isn’t always easy. Smaller OTAs can struggle to meet the financial guarantees or operational conditions needed to participate. The application itself is slow, and the ongoing compliance work doesn’t go away once you’re in.
Settlement timing creates its own issues. BSPs follow fixed weekly cycles with strict cutoff points. That doesn’t always match how or when your suppliers need to be paid. If your cash flow runs on a different schedule, managing the gap becomes an ongoing problem.
Things get more complicated across markets. BSP setups don’t transfer between countries, so OTAs working in multiple regions often need separate agreements. That means extra admin, more overhead, and less flexibility when managing airline payments globally.
How to overcome payment challenges faced by OTA
Solving payment issues in travel starts with treating payments as a central function of your operations. When you prioritise stability, visibility, and responsiveness in your payment setup, you reduce delays, improve supplier relationships, and create smoother experiences for customers. Several key areas deserve attention:
- Upgrade your technology. Use a modern system that processes transactions in real time, integrates easily, and provides full visibility into every step. This helps you track funds, resolve problems quickly, and avoid breakdowns during peak periods.
- Build stronger fraud and risk controls. Set up early detection for suspicious transactions, define clear protocols for failed payments, and maintain a structured response process for disputes and chargebacks.
- Rework supplier arrangements. Misaligned payment terms create avoidable cash flow gaps. Align settlement timelines, discuss alternative methods where possible, and maintain regular communication to avoid surprises.
- Improve cash flow planning. Forecast both total income and expenses, along with the timing of each. Track when payments are expected and when supplier obligations are due, so that mismatches don’t leave you short.
- Automate wherever possible. Reduce manual reconciliation and administrative work by automating routine processes. Clean reporting and reliable alerts help your team focus on the issues that matter most.
Every improvement makes payments run a bit more smoothly and helps prevent small issues from turning into bigger ones. With time, these changes add up making your operation steadier, more flexible, and better equipped for the real pace of travel.
The role of virtual cards in online travel agencies’ payment processes
Virtual cards have changed how online travel agencies handle payments, offering a safer and more flexible option compared to traditional cards. Each virtual card is unique to a single transaction, which greatly lowers the risk of fraud. OTAs can set spending limits beforehand and access detailed reports, giving them clear control and insight into where every payment goes.
One of the biggest advantages is how quickly virtual cards can be created. Through API integration, these cards can be generated instantly within booking systems, automating payments and reducing manual errors. This speeds up cash flow and helps keep bookings confirmed without delays. More and more suppliers, including hotels and airlines, now accept virtual cards as a standard payment method. This wider acceptance makes it easier for OTAs to pay their partners quickly and securely.
For a detailed overview of how virtual cards can improve your operations, check outThe Complete Guide to Virtual Cards for Business.
Cost savings come from lower processing fees compared to physical cards and bank transfers, as well as cutting out the costs and hassle of managing physical cards. Detailed transaction data also helps OTAs find ways to reduce expenses and improve payment efficiency.
By using virtual cards, OTAs can solve many payment problems at once, from increasing security and simplifying workflows to lowering costs and building better relationships with suppliers. This makes their payment processes smoother and more dependable.
Why Wallester’s solution is right for OTAs
Wallester offers a payment platform made for the specific needs of online travel agencies. Their virtual card system lets OTAs generate cards instantly with spending limits that can be tailored for each transaction, giving clear control over payments and reducing fraud risks. The platform’s API integrates directly with booking systems, automating payments to cut down on manual work and errors.
Security is a major focus. Wallester provides strong fraud detection and real-time monitoring, plus flexible controls that adapt to different booking types. For OTAs working internationally, multi-currency support and fair exchange rates make paying global suppliers easier.
Wallester also gives OTAs detailed reports and live transaction data. This transparency helps agencies keep track of payments, spot issues early, and manage cash flow better — especially important when timing between customer payments and supplier settlements can be tricky.
Key features include:
- Instant virtual card creation with adjustable spending limits
- API integration for seamless payment automation
- Strong fraud protection and real-time transaction tracking
- Support for multiple currencies and competitive exchange rates
- Detailed reporting to improve payment tracking and cash flow
With Wallester, OTAs can handle payment challenges more efficiently, reduce risks, and keep their operations running reliably no matter where in the world they work.
If you’re looking for a virtual card platform built to support real-time payments, global suppliers, and fast-changing booking volumes, take a closer look at Wallester. It’s made for OTAs that need speed, control, and visibility in one place.
Summary
- Online travel agencies (OTAs) face complex payment challenges including cash flow timing, fraud, currency management, and regulatory compliance.
- The travel distribution chain involves multiple parties, making payment flows difficult to manage.
- Cash flow issues are the leading cause of failure for many OTAs due to timing mismatches between customer payments and supplier obligations.
- Fraud risks are high due to the international and high-value nature of travel bookings, requiring advanced detection and prevention measures.
- Many payment providers lack the specialised support and innovation needed to address the unique needs of OTAs.
- Outsourcing card processing can lead to loss of control, technical friction, and higher costs.
- Cross-border payments introduce challenges including exchange rate volatility, delays, regulatory complexity, and added costs.
- Legacy payment systems hamper growth with integration difficulties, poor scalability, high costs, and security vulnerabilities.
- Virtual cards offer OTAs better security, real-time processing, automation, and supplier acceptance, while reducing costs.
- Wallester’s payment platform provides tailored virtual card solutions, fraud protection, multi-currency support, and detailed reporting designed for OTA needs.
- Effective cash flow planning, supplier negotiation, and automation are essential for smooth OTA payment operations.
