While my team and I have been focused on payments innovation and the role of pay by invoice in retail, some super interesting things are also happening in the world of travel, especially when it comes to travel intermediaries.
Our friends at Edgar Dunn (EDC) recently published an article that does a great job of outlining the key pain points in this sector and the trends shaping what comes next. Based on interviews with global travel intermediaries (OTAs, TMCs, bedbanks, NDC aggregators and tour operators), the EDC study highlights how new technology and business models are causing increasingly complex payment requirements. These are becoming a structural barrier to growth in the travel sector. Specifically, some of the challenges that intermediaries consistently highlighted (and my POV on solutions) include:
- Reconciliation Complexity
Fragmented payment flows—across cards, virtual credit cards (VCCs), bank transfers, Billing and Settlement Plan (BSP), invoices and wallets—make automated reconciliation difficult. Data quality is inconsistent and financial incentives are delivered separately and in incompatible formats. We see this complexity as an opportunity to take a fresh look at ways to simplify and automate through the lens of order-to-cash and tighter partnerships among key providers. As a former strategy consultant, I also see significant opportunity to use this lens to drive broader customer experience transformation efforts as well.
- Cash flow Pressure
Core structural tension arises from mismatched timing between customer pay-ins and supplier pay-outs. Fixed supplier settlement cycles (e.g., BSP for airlines) contrast with delayed corporate client payments. Billback models and long credit terms further strain liquidity, limiting scalability. This is a place where next-gen AI-enabled A/R automation technology steps in, offering capabilities to both cut manual tasks and deliver better forecasting and more predictable DSOs. We also see a growing role for alternative payment methods (like UATP) in the value chain, offering a “better deal” to airlines plus the data that corporates and TMCs crave.
- Trade-offs Across Payment Methods
Despite the popularity of virtual cards and their incentives, they carry higher acceptance costs for suppliers and can create operational friction. Meanwhile bank transfers are cheaper but lack credit, granular remittance data, predictability (especially, cross-border) and incentives. In our view, Pay by Invoice fills this gap with the control and convenience buyers want – plus features like contract price management and rebates they need, along with the credit and smart invoicing that suppliers require to scale their commercial business.
- Compliance and Regulatory Burden
Intermediaries face diverse and evolving rules across markets—eInvoicing, tax reporting, PCI DSS, KYC/KYB and BSP obligations. Tighter BSP settlement cycles, mandatory einvoicing in several European markets and localized reporting standards raise both operational and financial requirements. To us, this requires helpers that can both scale globally and operate locally while ideally offering sophisticated in-house AI-enhanced underwriting, decisioning and fraud protection.
Emerging Trends
EDC’s article also highlights some key emerging trends which are redefining travel payments. New distribution models including New Distribution Capability (NDC) and agentic commerce lead the discussion, but API-centric ecosystems are also highlighted and how they increase the need for integrated, flexible payment methods. Payment orchestration and new tech-led entrants are also called out to set the stage for more fully embedded payment (plus booking and expense) stacks.
In this setting, we agree that embedded payments offer new channels for TreviPay and our partners (especially as TreviPay was named a leader for Embedded Payment Applications by IDC last year). We also see increasing interest in offerings like Pay by Invoice as more intermediators have an appetite to explore alternative rails, are focusing more on working capital and financing needs, and are being pushed to better leverage AI and automation across the entire O2C cycle, as highlighted in the following chart from EDC.
Zooming out, a key headline from this work is that as distribution models evolve and the global online travel market expands rapidly, payment operations have shifted from a back-office function to a strategic source of competitive advantage. We agree! In fact, we’ve seen this first-hand in our work with airlines like United Airlines and Air Canada and hotel operators like Choice Hotels.
Looking more broadly and back to my consulting days, it’s also clear to me that payment providers who tend to succeed in travel excel in two areas: they have a global network and an intelligent, industry specific platform, network apps and services, and they have deep industry know-how and strategic partnerships with both travel-specific rails and global card networks to accelerate cashflow and drive scale.
Summing up, EDC’s article argues that intermediaries must rethink payments not only as critical infrastructure but also as a strategic lever for:
- Managing working capital
- Reducing operational friction
- Strengthening supplier relationships
- Improving margins
- Enabling sustainable growth
Achieving this requires flexible architectures, more intelligent networks, tools to harness and standardize data and insights and ultimately partners who understand travel-specific complexities.
For OTAs, TMCs and others in this space who are looking to better serve and grow their corporate offerings, we’d love to talk.
