White Paper offers practical insights for travel intermediaries navigating the complexities of cross-border B2B travel payments
SUNRATE, a global payments and treasury management platform, has unveiled a new white paper entitled “Navigating the Complexities of Cross-Border B2B Travel Payments: Practical Insights for Travel Intermediaries” at Travel Tech Asia 2024, Asia’s premier Travel Technology Trade Show.
According to Statista, global revenue from the online travel market reached nearly 600 billion US dollars in 2023, with projections indicating steady growth in the coming years, expected to surpass 800 billion US dollars by 2028. Moreover, when examining global travel and tourism revenue by sales channels, the dominance of the online market is clear, with online transactions accounting for over two-thirds of the total sales value.
Despite the lucrative opportunities in this expanding industry, travel intermediaries such as Online Travel Agencies (OTAs), Travel Agencies (TAs), and Travel Management Companies (TMCs) face significant challenges, including high transaction costs, inefficiencies in payment processes, security risks, cross-border payment complexities, and the need for effective working capital management. These challenges can severely impact profitability and operational efficiency.
Additionally, in a landscape where some travel intermediaries are seen consolidating and offering payment solutions within their ecosystems, others must carefully evaluate their payment provider choices to avoid conflicts of interest and ensure the security of customer data.
Shawn Qin, Head of Card Business at SUNRATE, commented, “We are pleased to present this comprehensive white paper, tailored specifically for travel intermediaries. At SUNRATE, we understand the unique challenges associated with managing B2B travel payments. Our goal is to offer practical and actionable advice to streamline payment processes, reduce costs, and enhance efficiency. As an agnostic and independent payment service provider, SUNRATE is committed to protecting the interests and data of its clients.”
The white paper explores six critical issues impacting travel intermediaries:
- Cross-border complexities: Managing multiple currencies and navigating various regulatory environments can be both complicated and costly for travel intermediaries. Cross-border transactions, in particular, incur high processing fees and administrative expenses.
- High transaction costs: The costs of cross-border B2B travel payments pose a significant financial burden on travel intermediaries, given the high transaction volumes and numerous foreign exchange mark-ups involved in payments across multiple payout corridors.
- Inefficiencies in payment processes: Traditional payment methods, such as automated clearing houses (ACH), billing and settlement plans (BSP), the Airlines Reporting Corporation (ARC), and cash, expose OTAs, TAs, and TMCs to financial risk due to their slow and error-prone nature. Many travel intermediaries still rely on outdated practices like manual invoicing or inefficient methods such as phone calls and faxes for hotel billing, which increases error risks and slows down payment cycles.
- Security concerns: Handling large volumes of financial data brings inherent security risks, particularly for travel intermediaries managing sensitive payment information across multiple platforms. Cyber threats are a persistent issue, with many businesses facing fraud attempts each year.
- Regulatory compliance challenges: The heavily regulated travel industry presents considerable challenges in maintaining compliance across different regions. Non-compliance can result in fines and penalties, significantly affecting profitability. Staying abreast of regulatory changes and implementing the necessary measures is essential to avoid legal and financial repercussions.
- Difficulties in data management and reporting: Effective data management is crucial for travel intermediaries to make informed decisions and remain competitive. Fragmented data systems can lead to errors and missed opportunities, undermining overall business performance. A common issue in the industry is the lack of unified data systems, which hampers companies’ ability to gain a comprehensive view of their financial and operational performance.
The white paper also provides actionable recommendations for travel intermediaries, highlighting the key benefits and opportunities that modern payment solutions offer. By adopting these tools, travel intermediaries can enhance operational efficiency, improve security, ensure regulatory compliance, and position themselves to meet the demands of a global and increasingly complex market.
For more information, please click here to download the white paper.