Thredd, a payments company, is partnering with Mastercard to offer travel agencies more efficient ways to handle international transactions through its network.

Overcoming Challenges in the Travel Industry

Online travel agencies (OTAs) such as Expedia or Airbnb encounter unique payment obstacles due to their industry’s nature. They often make bookings based on partial payments, which are at risk of changes or cancellations.

Payments Challenges in Global Travel

In the global travel sector, cross-border payments come with additional complications: higher fees, longer payment cycles, and regulatory barriers. These issues have long been significant pain points.

Virtual Card Payments for OTAs

Thredd’s platform enables OTAs to make virtual card payments tailored by geography, payment type, or transaction volume. Using product codes facilitated by the Mastercard Wholesale Program (MWP), travel companies can streamline payments and build trust with their global partners.

Building Trust

Establishing trust in the travel industry is challenging due to the numerous suppliers, from hotels to rental car companies, that OTAs must work with.

Customers Seeking Security

Travelers are increasingly concerned about the security of their payments. According to data from Outpayce, over 70% of respondents prefer booking with companies known for secure payment processes.

Struggles with Payment Methods

The security concerns are exacerbated by cross-border complexities and the rising risk of fraud. Additionally, a wide range of payment types have emerged in recent years, including local currencies, real-time payments systems, stablecoins, and central bank digital currencies (CBDCs).

This has led to a fragmented cross-border payment landscape, where many travelers must rely on multiple payment types for global transactions. For travel companies, this is an issue as well since they struggle to support the diverse range of payment methods available to their customers.

Inefficiencies in payment systems are also impacting profit margins, driving many travel agencies to explore payments modernization. The goal is to simplify processes and offer a more secure and reliable experience for both travelers and suppliers.