Solving the B2B payments challenge is the new frontier for travel

14 December 2021

For adventure tourism in 2022, the news is optimistic. Travelers continue to show major preferences for many of the experiences only you can provide: sustainable tourism, outdoor activities, and global experiences that immerse them in local cultures. The climate is especially favorable for international travel, where travelers will spend 228% more than they did in 2021, according to the World Tourism and Travel Council.

The travel ecosystem is complex, and, by extension, so are payments processes within it. We know from our research that customers increasingly factor ease of payment into their choice of agent. And we also know that many travelers (40% of the 800 we surveyed) have faced difficulties traveling because of payment issues.

It’s not hard to see why. Travel provides a really clear example of the interconnectivity between easing both B2C payment and B2B payments.

Let’s say you’re a Canadian heli-ski company that partners with an outbound operator based in Spain. As Canadian borders reopen to international travelers, a group of Spanish skiers are eager to book a heli-ski trip as soon as possible. They want to pay through the outbound operator in Euros, a pretty straightforward transaction for the agency (especially if they have a method in place to allow split payment). But the outbound operator then has to pay its partner heli-ski operator in Canadian dollars. If this transaction doesn’t go through smoothly, the heli-ski operator can’t book a spot and pay everyone on its end who are essential to delivering the experience for the skiers.

You can easily see how friction in the customer’s payment to agencies leads to friction in supplier payments, which then leads to challenges in the delivery of those experiences to the customer.

PYMNTS captured many of the sentiments in its recent “Smart Receivables Playbook: Rethinking Payments Processing After The Pandemic.” Taken as a whole, the travel industry spends more on processing payments than those in the technology and education sectors -- 3.2% of annual revenue, with nearly ¼ reporting spending as much as 4% of revenue on payments related costs. In addition to costs, efficiency killers are well at work. On the accounts receivable side, the list of concerns is long, and includes: struggling to answer payment questions from billed customers, waiting too long to receive payments, the lack of access to information around payments, complexity of managing multiple vendor relationships, difficulties accepting international and/or recurring payments.

There are also challenges on the payables side, with those surveyed reporting their key challenges is keeping track of payments to suppliers. Some 62% of travel and tourism businesses cite B2B payouts as at least a “somewhat” significant pain point, and one-fifth say they are a “very” or “extremely” significant issue.

But within all those challenges is an incredible opportunity for providers that can ease B2B payment flows.

Here are three areas to focus on that typically cause friction in B2B payments.

  1. Cross-border. As in our example above, the complexity of cross-border payments is a real roadblock to business. In our surveys, finance professionals have named it as a chief roadblock to international expansion.
  2. Short payments. When the agency or outbound operator is operating as the merchant of record, B2B payouts are often sent by means of legacy payment methods, one of which is wire transfers. Short payments can often result from intermediary fees and undisclosed FX rates being taken out of payments -- which have not been accounted for by the payer.
  3. Payment methods. Without the right platform, different preferred payment methods by agents or aggregators and travel operators, hotels and more can prevent them from working together altogether.

Forward-looking travel agents, aggregators and operators will look to digitize and automate more of the B2B payments process -- with the knowledge that the more secure and easier it is to move money within your travel ecosystem, the better your travelers’ experiences will be.

To discuss your payment challenges with an expert, request a free travel payments assessment at