Few industries are as competitive or fast-paced as travel. And in their drive to stay lean and
responsive, Online Travel agencies (OTAs) are being encouraged to embrace new
technology and rethink how they manage payments and data. Dave Robinson, Managing
Director at Pax2pay, shares his perspective on how travel businesses, particularly OTAs, can
keep pace.
The Rise of Virtual Cards
When virtual cards were first introduced, OTAs were still building their online systems, and
digital payment methods were in their early stages. When virtual cards were first introduced,
OTAs were far less dominant than they are today, which made the sales process relatively
straightforward.
As Dave states, the pitch was simple:
“If you want to play in this space, you need to use VCs for reconciliation,
security and fraud control”.
An added incentive was the rebate revenue that lodged physical cards could not provide.
Initially, only credit-based virtual cards were available, but the introduction of prepaid options
sparked even greater demand. For businesses within travel technology groups, integrating
payment systems directly into booking platforms proved transformative. It allowed payments
and bookings to work seamlessly together, creating efficiency and accuracy across
transactions.
A Market Transition
The virtual payments space has since become much more crowded, making innovation and
experience essential. Companies that truly understand both travel and technology can
continue to lead the way, developing solutions that meet the industry’s specific needs.
At the same time, travel patterns have become harder to predict. Many customers are
waiting longer to confirm bookings, often due to the cost of living and broader economic
pressures. This shift has made seasonal forecasting increasingly difficult, forcing businesses
to be more flexible and adaptive in their planning.
The March of Airlines
expanded into the tour operator sector, packaging and selling complete holidays rather than
just flights. Jet2, easyJet Holidays and TUI are already strong in this space, and others are expected to follow. Such moves reduce the need for third parties to handle flight payments
Meanwhile, long-haul travel through IATA carriers offers significant opportunities for growth.
Specialist OTAs and business travel agents are particularly well placed to serve this market.
Although IATA’s BSP scheme still manages most payments, the use of cards is increasing,
and the value of this segment already exceeds that of the low-cost carrier market
People and Data at the Core
Two things underpin success in travel today: people and data. Payment systems are no
longer just tools for transactions; they are a source of valuable insight. The detailed data
generated from both card and bank payments reveals how, why and when customers
choose to book.
For virtual card providers such as Pax2pay, this data helps make OTA payments more
transparent and actionable. Analysing it provides a clearer understanding of customer
behaviour and supports better business decisions.
Guidance for New OTAs
For new market travel agencies (MTAs), success begins with strong systems, direct supplier relationships and adaptable payment options.
Booking and back-office systems should integrate easily with airlines, manage add-ons
and connect through APIs. The back-office must support ticketing, payment tracking, hotel
contracting and newer tools such as digital boarding passes.
Hotel contracting works best when agencies build direct relationships with hotels. Doing so
provides greater control, reduces reliance on intermediaries and can improve margins.
Flexible payments are essential. Working with providers that support multiple payment methods, including bank transfers and virtual cards, helps agencies offer convenience to
customers while maintaining smooth operations.
The Rise of Virtual Cards
The travel industry continues to evolve at speed. To succeed, OTAs and new entrants must
use data effectively, embrace integrated systems and choose payment solutions that offer
flexibility and insight. Combining advanced technology with a genuine understanding of
travel will be key to shaping the next phase of growth.
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