How Fintech is Changing the Travel and Hospitality Industries

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By Paul Marcantonio, Executive Director – UK & Western Europe at ECOMMPAY

Travel spending is showing signs of recovery after the pandemic. However, lifestyle shifts will continue to influence industry trends, especially when it comes to online payments.

The travel and hospitality industries experienced an unprecedented crisis during the COVID-19 pandemic. Entire client bases disappeared, and many experienced staff were forced to find alternative work. With the hospitality sector now largely back in business, operators are nevertheless feeling the pressure — not only from reduced capacity but also from clients who are now used to using the latest digital payment methods to pay for goods and services online.

According to ECOMMPAY’s survey data (in collaboration with Censuswide), almost a quarter of UK consumers (22%) believe that the travel industry could offer better or improved payment services — such as options to pay a deposit or request a refund. The hospitality sector finds itself in a similar situation, with 17% of survey participants seeing the potential for better payment services. In this article, we highlight some of the latest fintech payment trends and the advantages they offer to the industry.

Shifting Consumer Payment Trends

Until around ten years ago, paying for travel or hospitality services by bank or credit card was the only realistic option. However, as post-COVID travel itineraries become more complex (and more expensive) and demographics slowly shift, the industry is beginning to embrace more modern payment methods, including Google Pay and Apple Pay. These payment technologies provide a better experience for clients who are used to tapping on a Smartphone screen to make all their online purchases.

“We now live in an age where there are a plethora of choices. We need to offer as many payment methods as possible to give clients the best experience and keep them engaged. I think that people perceive that a business is progressive and forward-thinking if they see multiple payment choices. It’s an easy win and helps to make your business look more modern.” — Marc Vincent, CFO, Newmarket Holidays.

So what are the latest payment trends gaining popularity in eCommerce, and what advantages do they offer to the travel industry? Here are a few examples:

Open Banking

Open Banking is both a technology and regulatory standard that aims to hand control of banking data back to consumers, increasing both transparency and control. The protocol works across the EU and UK and allows users to securely transfer money between accounts and authorise online payments directly from a banking app or website.

Unlike card payments, Open Banking transactions have no intermediaries. In addition, compared to regular transfers that can take 3-5 days to clear, settlement using Open Banking happens within seconds. The service enables a much smoother banking experience and offers significant advantages for travel and hospitality businesses:

  • Improved checkout conversion due to seamless, mobile-first payments without the need for manually inputted card data.
  • Better acceptance rates, with up to 95% successful transaction rates compared to a 5-14% failure rate with regular card payments.
  • Up to an 80% saving on fees compared to traditional card transactions.
  • Zero chargebacks, protecting travel agents from fraudulent transactions and hoteliers from no-shows.
  • A more user-friendly payment experience for consumers, with enhanced security.


Buy Now, Pay Later allows customers to set up a flexible, short-term financing plan with the total purchase cost of a travel package or accommodation going straight to the provider, with instalments collected by the BNPL scheme operator.

BNPL is rapidly gaining ground with UK consumers and is likely to become the fastest growing payment trend in 2022 — despite more stringent government regulation on the horizon as we near 2023.

According to an ECOMMPAY survey targeting travel and aviation industry representatives, Buy Now, Pay Later is growing in popularity as a travel payment method, with 94% of respondents noticing a rise in use since COVID-19 restrictions eased.

For travel operators, ATOL protection adds an additional layer of complexity to Buy Now, Pay Later, which will require careful consideration, but that shouldn’t stop businesses from considering this popular payment method.

What Are the Advantages of BNPL for Travel and Hospitality?

  • BNPL offers a degree of financial protection, as payment is received immediately, leaving the BNPL scheme provider to collect instalments.
  • When a client pays using BNPL, it may be easier to upsell more expensive packages or upgraded accommodation. This means merchants will often receive more money per client with BNPL than with alternative payment methods.
  • Offering alternative payment methods gives customers a greater level of choice, which can often help with conversion at checkout.

The Advantages of Multiple Payment Options

Last year, ECOMMPAY conducted a comprehensive end-user and business survey in collaboration with Censuswide, which found that approximately 25% of shoppers would consider leaving a checkout page if their preferred payment method wasn’t offered. In addition, 80% of consumers ranked easy payment and efficiency as defining characteristics of a strong customer experience, so it’s becoming increasingly necessary to offer travel shoppers as many of the most popular payment methods as possible — including those local to their geographical region.

In Conclusion

As the industry evolves to cater to a post-COVID clientele, it must account for the permanent changes to the consumer landscape. Today, customers are more technically aware and eager to use various methods to pay and interact with their favourite brands. Therefore, it is down to travel companies to research the latest fintech solutions and add them to their offering to operate more fluidly at the forefront of the emerging market boom.

Article by ECOMMPAY

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