In Asia’s fast-evolving travel industry, a revolution is quietly unfolding. Driven by rising consumer expectations for seamless experiences and the need for cost efficiencies, travel companies are embracing fintech solutions like never before.
This convergence of travel and finance isn’t just about making payments easier; it’s about transforming every part of the travel experience, from booking and payments to loyalty programmes and cross-border services.
With Asia’s unique market conditions, including a diverse consumer base and fragmented financial infrastructure, this shift is attracting a wave of new players, from digital payment startups to super app giants, all aiming to capitalize on a market ripe for disruption.
As Timothy Hughes, vice president, corporate development, Agoda, says of his company, “We’re a very deliberate fintech company. In the OTA space, if you make a mistake in the way you pay people, you hurt your cash flows. If you make a mistake in the amount of money you’re paying in merchant fees, you can destroy your bottom line. If you can save ten basis points, you can make the year.”
Tim Hughes (left): “In the OTA space, payment can make or break your cash flow.” Right, Kelvin Li: “Payment is actually one of the largest cost items of an OTA or player in the travel industry.”
Travel companies as fintech players: “Payment can make or break cash flow”
Travel companies have traditionally operated as intermediaries, focused on booking flights, hotels, and transportation. But today, they’re actively positioning themselves as fintech players, recognizing that payments and financial services are crucial to their bottom line. With margins tight and competition fierce, managing payment costs has become a critical lever for profitability.
According to Hughes, who moderated the panel, “Payments: Powering The Next Generation of Travel” at WiT Singapore, travel companies have realized that payments are not just a service but a strategic part of their operations. “In the OTA space, payment can make or break your cash flow. Payments have become such a critical cost item that managing it well can be the difference between profit and loss,” he explains.
Kelvin Li, Head of Platform Tech Business Unit, Ant International, noted, “Payment is actually one of the largest cost items of an OTA or player in the travel industry. It’s actually even higher than the distribution costs they’re paying.”
Done right, it “allows you to reduce the cost and optimize payment, not only as a cost factor, but probably can become a contributor to your revenue and profit”.
This focus on payments is driving travel companies to build in-house fintech capabilities or partner with specialized providers who can streamline the payment process, reduce fees, and improve the overall traveller experience.
Nakul Kothari: “Whatever your payments team does within a company, we do it for our merchants in a much better way.”
The rise of payment orchestration
One of the most significant trends in travel fintech is the rise of payment orchestration platforms, which help travel companies manage their entire payment process end-to-end. Instead of relying on multiple payment providers and platforms, payment orchestration enables a seamless, optimized payment experience, all within a single framework.
“Payment orchestration handles the payment integrations for the merchant. We develop the checkout experience, help them optimize or reduce the transaction cost, improve the conversion rates, and streamline their payment operations,” says Nakul Kothari, Head of Market Expansion, Juspay, India. “Whatever your payments team does within a company, we do it for our merchants in a much better way.”
Ken Kim: “Using the same payment method as locals do is part of the travel experience.”
Local payment options as a travel experience
For travellers, the ability to pay with familiar methods can be as important as trying local food or exploring new destinations. Travel companies are tapping into this by offering local payment options, making it easier for travellers to use payment methods they’re comfortable with – even abroad.
Ken Kim, CEO of GLN International, South Korea, calls it “payment roaming”. “People travelling want to use the same financial services abroad as they do at home,” he said.
And “using the same payment method as locals do is part of the travel experience,” says Kim. “Just like trying local food, this experience drives up payment activity. GLN customers make over 20 more QR payment transactions per person during a three or four-day trip. They see payment as a part of the travel experience.”
Kelvin Li: “We are trying to connect with all the RTPs [real-time payment systems] of each country and use a payment engine in between, powered by blockchain, to allow cross-border payments to be done instantly, 24/7, with transparency and lower cost.”
Real-time cross-border payments
Cross-border payments have long been a pain point in the travel industry, with high fees and slow processing times. Now, fintech companies are tackling this issue head-on with real-time payment systems and open banking, promising faster, cheaper, and more transparent transactions across borders.
“We are trying to connect with all the RTPs [real-time payment systems] of each country and use a payment engine in between, powered by blockchain, to allow cross-border payments to be done instantly, 24/7, with transparency and lower cost,” says Ant International’s Li.
This push towards real-time cross-border payments could be a game-changer, allowing travellers to move money across borders as easily as they would at home, while significantly lowering costs for travel companies dealing with international payments.
Super apps and integrated travel fintech ecosystems
Asia’s super apps, platforms that offer everything from ride-hailing to financial services, are also making waves in travel fintech. Companies like Tata Group with its Tata Neu app and AirAsia with its AirAsia MOVE app are creating ecosystems that integrate travel, fintech, and lifestyle services.
“There are companies creating this in the travel space. The Tata group, which powers Air India, has a super app where they do everything from travel booking, insurance, fintech, grocery delivery,” says Kothari. “AirAsia has developed the AirAsia MOVE super app, which is doing the same thing.”
The untapped potential of B2B payments
While B2C (business-to-consumer) payments in travel have seen rapid advancements, the B2B (business-to-business) side remains complex and outdated. Many B2B payments are still processed manually or through legacy systems, resulting in inefficiencies and high transaction costs.
Raiting the efficiency level in both areas, Kothari said, “In the B2C space, the score would be a little higher, let’s say eight or nine. But on the B2B side, the score will be less, six or seven. In B2B payments, we are still lagging. Many transactions are still happening offline rather than online.”
Leveraging payment data for insights and new services
For travel companies, handling payments is about more than just processing transactions. Payment data offers a wealth of insights into customer behaviour, allowing companies to offer tailored financial products such as buy now, pay later (BNPL), travel insurance, and even loyalty programmes based on payment patterns.
“Once you have handled your payments, you get a lot of data through which you can get some insights into customer behaviour,” says Kothari. “Then you can partner with insurance providers, fintechs to give BNPL, credit cards, increase affordability. Payments is the first step for a company in a long process to become a proper fintech company.”
Multi-currency pricing and exchange rate benefits
In a region as diverse as Asia, multi-currency pricing is another key area of innovation. With advanced multi-currency solutions, travel companies can offer customers the ability to pay in their local currency, reducing friction and making the experience more user-friendly.
“We enable merchants like airlines, hotel groups, and OTAs to accept multi-currencies from a product called MCP,” says Ant Group’s Li. “If you price a hotel here in Singapore dollars, we allow customers from India to pay in local currency, people from Europe to pay in euros, and Koreans to pay in KRW.
“We use AI technology to lower the cost and enable this to link with the membership of airlines, allowing more favourable exchange rates for higher-tier members.”
The road ahead: A fintech-led transformation of travel
The travel fintech space in Asia is still in its early stages, but the potential for innovation is immense. By adopting payment orchestration, real-time cross-border payments, local payment options, and super app integrations, the industry is setting the stage for a new era of travel.
In the words of GLN’s Ken Kim, “Travel companies should aim to provide a seamless experience within one application. Payments are especially important because they can complete every part of the travel process. That’s why travel companies are getting to look more like fintech companies.
“Fintech is a business based on technology, so you should keep your eyes on the technology and trend changes.”
If not, pure fintech companies could well move into the travel space.
This post was originally published on here
