As the travel industry processes over $11 trillion annually, owning its fintech solution could potentially slash transaction fees from 2-3% to 0.1%, saving up to $273.5 billion annually.
If you think that recent years were transformative for travel with the rise of AI, you haven't seen anything yet. As we enter 2025, more and more major players, such as airlines and GDSs, are signaling a shift towards retailing with new business models. But they face one big issue: payments.
Today, the travel financial space is fragmented, with multiple stakeholders, currencies, and jurisdictions converging in nearly every transaction. From airlines and hotels to tour operators and travel agencies, each vertical faces complex financial challenges that traditional banking systems or innovative startups struggle to address efficiently.
This article explores why travel companies must prioritize owning and maintaining their fintech solutions to remain efficient and independent in the digital era while meeting modern consumer expectations.
Disclaimer: Chain4Travel is not alone in recognizing this trend. There are several companies already building solutions that confirm the industry's momentum and underscore that rather than pure competition, "travel fintech" can be characterized by composability, when different players tackling complementary challenges, collectively building a more efficient, secure, and user-centric financial environment for travel:
- TravelLedger, specializing in efficient B2B settlement processes;
- Nilos, a liquidity network bridging fiat and digital currencies;
- Bridge, offering banking-as-a-service built around stablecoins;
- Due, an aggregator supporting multiple currencies.
No doubt that travel is a global industry. Looking at major airline destination maps, it's clear how connected the world has become in recent decades. The longest direct airline connection currently is from New York (JFK) to Singapore (SIN), covering a distance of 15,332 kilometers (9,537 miles) with a flight duration of about 18 hours and 40 minutes. Believe it or not, but after you book a flight the payment for this ticket may be traveling hours, days or even weeks until arriving to the carrier.
Global travel businesses face significant hurdles when processing international payments, including high transaction fees (averaging 2-3% of transaction value), foreign exchange risks, and payment delays, all of which create barriers to global expansion and erode profit margins.
In 2025 there are multiple advanced fintech solutions capable of solving the cross-border payment problem. Many are open-source and decentralized, meaning the travel companies can securely manage funds across multiple currencies without the need for local bank accounts in each market, and most importantly, without intermediaries.
Of course, such a solution requires the adoption of new technologies, such as digital wallets. But according to the recent updates from EU and multiple Asian countries, digital wallets, IDs and currencies will be introduced to the mass market in the upcoming years.
One of the most significant pain points in the travel experience is the notoriously slow refund process, which is frustrating for service providers, distributors, and, of course, customers. Unfortunately, traditional systems often require days or even weeks to return funds, leading to frustration, complaints, and damage to brand reputation and financial losses for businesses.
However, today there are solutions to equip travel companies with automated reconciliation and instant payment capabilities helping them process refunds right at the moment of a delay or cancelation directly to the digital wallet of a traveler. All done automatically making the situation less painful which builds customer trust and loyalty during challenging situations like cancelations or service failures. The same flow can be applied for handling baggage losses or baggage delivery delays.
It is obvious that the more digitized the world becomes, the higher the stake of reputation and relations with customers is. Travel fintech solutions capable of automating refunds can directly improve customer retention and lifetime value.
Sad to admit, but the travel industry remains a prime target for payment fraud estimated in tens of billions of dollars annually. Companies losing substantial revenue to chargebacks, stolen credentials, and sophisticated scam operations.
Modern fintech tools offer built-in security features like tokenization (replacing sensitive payment information), end-to-end encryption, and two-factor authentication, which can reduce fraud rates, helping travel companies protect their revenue and improve overall security and regulatory compliance.
Existing payment systems in the travel industry are poorly optimized for small transactions, with processing fees often making micropayments (typically under $10) economically unfeasible. Especially in the industry where the margins are thin, which severely limits travel companies' ability to provide real retail choice of extras (get your beloved local wine when arriving in the hotel or order a bouquet of flowers while booking the flight) and monetize small-value ancillary products that could make the experience special while creating new revenue streams and supporting local vendors.
Purpose-built travel fintech solutions reducing transaction costs will actually make micropayments efficient. Blockchain-based payment networks and wallet-to-wallet transfers can process micropayments with minimal overhead, allowing travel companies to price and sell small-ticket items and services profitably at scale.
With micropayment capabilities, travel companies can eliminate constraints and become more flexible. For example, airlines could offer pay-per-use lounge access in 30-minute increments, hotels might provide hourly room rentals for day travelers, and tour operators could sell individual short excursion add-ons.
Another pressing issue that airlines, in particular, must address urgently is sustainability. Many are trying to keep up with the regulation, but often current carbon offsetting programs lack transparency, leading to accusations of "greenwashing" when travelers cannot trace where their sustainability contributions actually go.
Advanced travel fintech platforms can make such sustainability efforts transparent with programmable payments. Smart contracts (self-executing programs) can ensure that when travelers pay for carbon offsets or sustainable aviation fuel (SAF) contributions, these funds are automatically and verifiably directed to certified environmental projects or SAF producers. This creates an immutable audit trail that allows all interested parties (regulators, travelers, businesses) to track exactly where their sustainability payments go and their actual environmental impact.
With automated, transparent, and trustless execution of environmental commitments, travel companies can transform sustainability from a marketing buzz to a verifiable action and actual impact. With SAF adoption being crucial for aviation's decarbonization goals, a travel fintech solution that integrates SAF funding into the booking process can drive meaningful change.
Traditional financial systems, like credit cards or SWIFT, are being challenged by fintech innovations that promise faster, cheaper, and more transparent transactions. The status quo, where banks profit from delayed settlements, is no longer acceptable in an era where information moves instantly. Travel companies must recognize this shift and capitalize on it by developing their own fintech solutions.
A recent industry report found that 56% of travelers think travel is more complex now than it was ten years ago, while 47% of consumers feel that new fintech players have made managing personal finances easier compared to five years ago, and 44% believe fintech apps have reduced the complexity of managing finances.
The financial aspect of travel has remained largely unchanged despite massive digital transformation in other areas like booking and customer service. While travelers can instantly browse and book complex itineraries on their smartphones, the underlying financial infrastructure still relies on decades-old systems designed for simpler, slower commerce.
This disconnect creates friction that impacts every aspect of the travel experience: from the initial booking to potential refunds (which is always associated with emails, calls and a lot of verification - hence stress for everyone). This stress becomes a real competitive disadvantage of travel companies as consumer expectations adopted from other "retail experiences" continue to rise.
If the message of this article "Travel needs its fintech solution" is clear and you would like to take actions, consider the following ideas:
It is obvious that there are many more reasons for the travel industry to develop and adopt a fintech solution that serves the interests of travelers and companies creating and distributing travel products.
The points mentioned above are among the features already implemented and available to travel companies via the first web3 travel distribution platform, called the Camino Messenger. In a nutshell, it combines functions that make digital transactions between travel companies secure, fast, and cheap.
| Feature | What does it mean |
|---|---|
| Decentralised Network | No single company owns or controls the technology. |
| Wallet | Secure digital "accounts" that can manage both payments and digital assets representing (tickets, bookings) in direct transactions. |
| KYC & KYB | Tools that verify the identity of businesses, allowing companies to see who they are interacting in the digital space. |
| Unified Travel Data Standard | A standardized format for packaging digital travel-related products, making them compatible across the network regardless of which system they originated from. |
| Travel-tuned fintech solution | Native financial technology designed for travel's unique needs, automating transactions from micropayments to refunds, handling multi-currency operations and distribution of processing costs. |
| Open-source | Travel companies can introduce new products to the network and quickly build message formats representing new "packages" adjust to the changing consumer demands. |
The travel industry has never before had a technology that provides companies with the capabilities of:
If all the above sounds like a fairytale, you have a chance to be its hero.
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