According to a small global survey, travel firm respondents were feeling the pinch of foreign exchange volatility, complex payment preferences
Based on an April 2024 survey of 473 payment-process/financial decision makers^ in seven global travel markets* about the state of their payment systems, some trends have been noted from the data.
First, 66% of respondents were seeing their profit margins impacted by outdated or complicated payment systems, with nine in 10 indicating they expected to prioritize modernizing their financial operations this year.
Second, while revenue from cross-border payments has been the rise for respondents, 70% of respondents cited complication of transactions due to the diversity of payment methods in different markets.
Other findings
Third, in the survey, credit cards, debit cards and digital wallets remained the most common customer payment methods. However, respondents indicated that travelers had been increasingly using local payment methods or peer-to-peer payment apps, which can vary widely by market. Also:
- 40% or less of the respondents cited that cross-border transactions were now commonplace: half of their revenues were from international customer payments. Meeting different market payment needs, foreign exchange (FX) fees, and managing multiple supplier and vendor payments in numerous countries was hindering respondents’ firms from expanding their supplier or vendor network in new markets. Some 75% cited earning more than one-quarter of their revenue from cross-border payments, while 88% indicated frequently making payments to suppliers or vendors in foreign currencies
- 67% “agreed” cited that cross-border payments have become more complicated due to the volatility of FX rates
- 50% or more cited a key challenge: managing multiple supplier and vendor payments in different countries using existing payment and financial infrastructure and reconciling bookings, payments, commissions, and refunds data
- 67% or so indicated that outdated or complicated payment systems were directly impacting their organizational efficiency and profit margins, with nine in 10 reporting at least a 2% erosion, and over one-third losing 10%
- 90% cited prioritizing upgrades to payment and financial operations systems, and 80% indicated they would be interested in an all-in-one payment and financial operations platform
According to Jack Zhang, co-founder/CEO, Airwallex, the firm that commissioned the research: “As global travel continues to boom, travel companies increasingly rely on quick and seamless cross-border payments to surpass customer expectations at every touchpoint… Slow and outdated payment processes are increasing the cost of moving money internationally, which is eating into their profits —modest at the best of times. Modernizing their financial operations … will be critical to reducing the cost and friction associated with managing cross-border transactions. For smaller players, this can be what levels the playing field, enabling them to compete with larger, more established counterparts.”
*Australia, China, Hong Kong SAR, Israel, Singapore, the United Kingdom and the United States
^with around 80% of respondents working in medium-sized travel firms comprising 20 to 600 employees
