Sofoklis Limniotis, fintech strategy and solutions director at HBX Group
FinTech has seeped into almost all elements of our day-to-day lives, revolutionising personal and professional money transfers across multiple services. The ability to streamline payments and financial management is crucial to any business, but this is particularly true in the travel industry where the customer’s journey passes through so many interconnected touch points.
From booking flights and hotels to settling invoices between partners, efficient and secure payments are essential. As part of ongoing digital transformation that is reshaping the sector, investing in modern FinTech solutions is key to not only improving business efficiency and profitability, but also to create better, more seamless experiences for end travellers.
Impact of fintech for holidaymakers
When thinking about how technology has shaped holidays, it’s easy to forget how quickly things have changed for travellers. Not so long ago, travellers would need to carry large sums of cash with them when venturing overseas, or they would be charged significant fees to transfer or withdraw money when abroad.
Now, digital bank accounts like Revolut or Monzo have made life much easier for travellers who have access to their money with no restrictions and real-time currency conversions at competitive rates. These tools don’t just make life easier; they encourage spending by removing friction. And that has a direct, positive impact on local economies.
Another major shift has been the introduction and rise of ‘buy now, pay later’ (BNPL) services the flexibility to book their holiday when they want, even if they don’t have the full funds immediately available. This has opened up the travel market to a wider range of consumers and helped improve sales and cash flow for businesses.
Globally, BNPL transaction value accounted for 334 billion US dollars in 2024 and double up by 2028. Well-known industry players such as TAP Air Portugal and Eurostar have already introduced BNPL to make booking transport more convenient for their customers, and companies will continue to diversify payment methods to suit customer expectations.
In a nutshell, consumers are offered curated payment options and flexibility, whilst digital payment methods provide a seamless payment experience that is fully integrated into the booking flow. This is a baseline expectation and no longer a future aspiration.
Behind the scenes in B2B
While the level of optionality and sophistication of consumer-facing payments in the travel industry has rapidly evolved, behind the scenes some processes still feel stick in another era. Approximately 75 percent of commercial payment flows use legacy methods, such as offline bank transfers, corporate cards and cheques, with significant drawbacks for corporates in terms of efficiency and profitability.
Indeed, money needs to flow easily and securely between each provider, but it can be a complex process. In just one holidaymaker’s trip, a diverse range of organisations could be involved in the ecosystem, from accommodation providers, transport operators, activity providers and so on, often spanning different countries, time zones and currencies, which only builds on the friction of the system.
At the same time, travellers expect everything connected. They want to book their whole trip in one step with one company they trust. In fact, that shift toward bundled experiences, has made indirect sales channels in the accommodation space rise from 20 percent in 2010 to 52 percent in 2023 demonstrating the increasing popularity of connected trips and the importance of partnerships in the travel industry.
But as this model becomes the norm, the pressure on B2B payments systems grows. Poor money management with clunky, legacy systems can have a significant knock-on effect on other business operations and can lead to revenue leakage. And when dealing with tight margins, as is the case for many companies, such inefficiencies do not go unnoticed.
Thankfully, there are better ways of doing things now. Virtual Credit Cards and Digital e-wallet solutions are already available and can simplify real time money movement whilst reducing the cost of cross-border and cross-currency payments and providing real time traceability of transactions. These payment options not only automate transfer of funds but also ensure increased security, granularity and digitisation of operations. The gains in terms of automated reconciliation and invoicing can really boost efficiency and operational scalability by reducing administrative burden. And for small-to-medium sized businesses, access to early payments or flexible financing can help manage seasonal cash flow more smoothly.
It’s not about chasing the latest shiny tool that’s out. It’s about fixing what’s broken. And for many in the travel industry that starts with rethinking how money moves between partners.
The power of partnerships
Technologies like this provide the marginal gains that travel companies need to thrive in globally connected ecosystems. However, undergoing significant digital transformations can be daunting, time-consuming and costly for travel businesses. In a time of so much technological change, it can be overwhelming to know where to start improving revenue operations.
This is where partnerships really come into play. By working with trusted partners that know the travel space and understand how cross-border payments really work, can prove to be beneficial and really accelerate implementation timelines.
The right partner will help spot and improve financial efficiencies, streamline operations and even identify additional revenue streams. They can also ensure they are operating in a secure, compliant and scalable manner that is adaptable to change. This is vital when it comes to protecting data and infrastructure as companies grow and evolve.
The Future of FinTech
The increased prevalence of FinTech has undeniably had a positive effect on the travel industry and will continue to do so in both B2C and B2B environments. As the world becomes more connected and traveller expectations keep rising, tools that save time and money while they increase efficiency, will be essential for the industry.
By working with trusted partners, travel companies can identify pain points in their customer journeys, stay ahead of the curve and build the kind of infrastructure that helps them compete and thrive in a fast-changing market.
