IATA’s latest framework shows airlines processed $977 billion in payments in 2024 while spending $22.2 billion to do so. With one in six travellers unable to pay using their preferred method, the industry’s payment challenge has become a tourism growth challenge.
Global (Tourism Reporter) — Every tourism professional understands where bookings are usually lost.
The fare is too expensive. The flight departs at the wrong time. A competing destination looks more attractive. A hotel review raises doubts. The itinerary becomes one connection too many. These are the friction points the travel industry has spent decades trying to remove through better marketing, smarter pricing, stronger loyalty programmes, and improved customer experience.
But one of tourism’s biggest conversion barriers arrives after all those hurdles have already been cleared.
The destination has been chosen. The flight selected. The hotel booked. The traveller is ready to buy.
Then the payment fails.
Not because the customer changed their mind. Not because demand disappeared. Simply because they couldn’t pay the way they wanted.
For an industry built on converting travel intent into actual journeys, this may be one of the most expensive blind spots in global tourism.
That is the central message of an opinion article published by Nick Careen, IATA’s Senior Vice President for Operations, Safety and Security, alongside the release of IATA’s new Airline Payment Framework – Management Foundation on 3 August 2026. While the framework is designed for airlines, the commercial implications extend far beyond aviation.
The numbers explain why.
According to IATA’s 2025 Global Passenger Survey, 17 per cent of travellers attempting to purchase ancillary services—whether an extra bag, seat selection, lounge access, or another upgrade—failed to complete the transaction because their initial payment attempt failed and no suitable alternative payment option was available.
That means nearly one in six potential purchases simply disappeared at the checkout.
Viewed against the scale of the industry’s payment ecosystem, the implications become even more striking. Airlines processed approximately US$977 billion in payments during 2024, spending around US$22.2 billion to do so. Every failed payment represents more than a lost airline sale. It represents a journey that becomes more difficult to complete, ancillary tourism spending that never materialises, and visitor revenue that destinations, hotels, attractions, and tourism businesses never receive.
This is not merely an airline payments problem.
It is a tourism growth problem hiding in plain sight.
The $977 Billion Payment Economy Tourism Barely Talks About
To understand why IATA’s opinion piece, published on 3 August, deserves far more attention from tourism professionals than a typical aviation payments discussion, it is necessary to appreciate the scale of the financial infrastructure that quietly powers global travel.
Airlines processed approximately US$977 billion in payments during 2024. That figure is far more than an airline revenue statistic. It represents the financial gateway through which international tourism begins. Before a visitor checks into a hotel, dines at a restaurant, hires a vehicle, or books an attraction, they almost always make one essential purchase: the flight. If that payment cannot be completed quickly, securely, and through the traveller’s preferred method, the wider visitor economy never gets the opportunity to earn its share.
The cost of processing those transactions is equally significant. Airlines spent an estimated US$22.2 billion on payment processing in 2024—equivalent to around 2.3 per cent of total payment value. For many carriers, that is comparable to their annual operating profit margin. Every unnecessary payment cost therefore reduces the capital available for fleet renewal, network expansion, customer experience improvements, and the route development that destinations depend upon to remain globally connected.
That is why IATA argues that payments should no longer be viewed as a back-office administrative function. Airlines that continue to treat payment strategy as an operational afterthought—rather than as a commercial capability—risk paying more to process transactions, waiting longer to receive revenue, and exposing themselves to higher levels of fraud and failed payments.
As Nick Careen, IATA’s Senior Vice President for Operations, Safety and Security, puts it:
“The implication is straightforward: payments can directly affect revenue, as well as how much airlines spend, how quickly they receive their money, and their exposure to fraud or failed transactions.”
For the tourism industry, that observation extends well beyond aviation. Every failed airline payment is a potential visitor who never arrives, a hotel room that is never occupied, a restaurant table that is never filled, and a destination that loses spending before the journey has even begun. Payment infrastructure is no longer simply an airline issue. It is becoming a fundamental determinant of tourism growth itself.
The Passenger Who Couldn’t Pay Is a Tourism Story
The 17 per cent ancillary payment failure rate is the statistic that deserves to be translated from the language of payment processing into the language of tourism, because that is where its true significance becomes clear.
Imagine a traveller—a Brazilian business executive, a Japanese holidaymaker, or an Indian family embarking on a long-planned overseas trip.
They have already done everything the tourism industry asks of them.
They found the right destination. Chose the right flight. Accepted the fare. Selected their seats. They are now adding an extra bag, purchasing travel insurance, or upgrading to additional legroom. The transaction may be worth US$60, US$150, or US$300. Their intention to buy is complete.
Then the payment fails.
In the best-case scenario, the airline immediately offers another payment option. The traveller switches methods, completes the purchase, and continues with only minor inconvenience.
But IATA’s survey shows that this does not always happen.
In roughly one in six cases, no alternative payment method is available. The transaction simply stops. Faced with a failed checkout after investing time and effort in planning the journey, the traveller abandons the ancillary purchase—and in some cases, abandons the booking altogether.
That is where the issue stops being an airline problem and becomes a tourism problem.
The industry’s loss is not merely the value of the failed baggage fee or seat upgrade. It is the chain of visitor spending that would have followed a successfully completed journey: hotel nights, restaurant meals, local transport, attraction tickets, retail purchases, guided tours, and the possibility of repeat visitation generated by a positive travel experience.
Every failed payment has the potential to interrupt that entire economic chain before it even begins.
The tourism industry spends billions of dollars persuading travellers to choose a destination. Losing them at the final click of the checkout because they cannot pay with their preferred method is among the most preventable forms of demand destruction in the modern visitor economy.
The Payment Diversity Challenge: Why One Payment Method Is No Longer Enough
Careen’s opinion piece identifies the rapid diversification of consumer payment preferences as one of the principal reasons airlines—and, by extension, the wider tourism industry—must now treat payments as a strategic capability rather than a back-office function.
As he notes:
“Passengers are using an increasingly diverse range of payment methods. While physical cards still dominate, options such as instant payment and digital wallets are growing rapidly. If an airline does not offer a passenger’s preferred payment method, it risks losing the sale.”
That observation becomes even more significant when viewed alongside the Henley Passport Index analysis that Tourism Reporter examined in its previous edition. The world’s most mobile travellers—Singaporeans, Emiratis, Japanese, and South Koreans—are not only among the holders of the world’s most powerful passports. They are also among the fastest adopters of digital payment technologies.
Across these markets, digital wallets and instant payment platforms have become part of everyday consumer behaviour. Apple Pay, Google Pay, Samsung Pay, Kakao Pay, Alipay, WeChat Pay, and real-time bank transfer systems increasingly sit alongside, and in some cases replace, traditional card payments.
For airlines and tourism businesses, this presents a strategic challenge.
A payment ecosystem designed primarily around Visa and Mastercard may continue to serve legacy source markets efficiently while creating unnecessary friction for precisely the Asian and Gulf travellers that destinations increasingly identify as their highest-value growth segment.
The consequence is rarely dramatic. It is simply commercial.
The traveller whose preferred payment method is unavailable is unlikely to begin searching for another card or banking solution simply to complete the transaction. More often, they abandon the purchase, book through another carrier, use a different online travel platform, or choose a destination whose booking journey feels more seamless.
In an industry where billions are spent attracting high-value international travellers, losing a customer because they could not pay the way they expected is not a technology failure. It is a competitive failure.
The destinations and travel businesses that remove payment friction for the world’s most mobile travellers will increasingly capture the greatest share of tomorrow’s tourism revenue. Those that do not risk losing customers before the journey has even begun.
The Ancillary Revenue Story: What Tourism Boards Need to Understand
For destination management organisations, tourism boards, and government tourism ministries whose success depends on maximising the economic value of every visitor, the ancillary revenue dimension of IATA’s payment framework deserves particular attention.
Ancillary revenue—charges for checked baggage, seat selection, priority boarding, lounge access, travel insurance, hotel bundles, car hire, airport transfers, and other add-on services—generated an estimated US$148.4 billion for the global airline industry in 2024, according to IdeaWorksCompany. Much of that revenue is earned from travellers who are already committed to their journey. They have chosen their destination, booked their flight, and are actively investing in making their trip more comfortable, convenient, or memorable.
This is demand that already exists.
IATA’s finding that 17 per cent of ancillary purchase attempts fail because the payment cannot be completed suggests that a significant share of this high-intent spending is being lost—not because travellers changed their minds, but because the transaction itself broke down at the final stage.
That distinction matters.
This is not a marketing problem or a pricing problem. It is a conversion problem.
The implications extend well beyond airline balance sheets. Many ancillary products are directly connected to the wider tourism economy. Airlines increasingly bundle or cross-sell hotel accommodation, car rental, airport transfers, travel insurance, destination attractions, and curated visitor experiences through their booking platforms.
When a payment fails at the airline checkout, the consequences ripple through that entire ecosystem.
The traveller who abandons the transaction may never purchase the hotel package, reserve the rental vehicle, book the airport transfer, or confirm the attraction ticket that formed part of the same booking journey. A single payment failure therefore represents not only lost airline revenue, but potentially lost business for hotels, tour operators, destination attractions, transport providers, and local tourism enterprises.
For destination managers, this reframes payments as more than an airline operational issue. They are part of the destination’s commercial infrastructure. Every improvement in payment completion rates increases the likelihood that visitor intent is converted into visitor spending—not only in the air, but throughout the visitor economy.
The Framework: What Airlines — and Tourism — Need to Change
IATA’s Airline Payment Framework – Management Foundation is, fundamentally, not a technology manual but a governance framework. It does not recommend specific payment platforms or providers. Instead, it provides airlines with a structured way to evaluate payment strategy across their commercial, finance, treasury, digital, technology, and risk functions as a single business discipline rather than a collection of disconnected operational decisions.
Nick Careen explains the framework’s purpose succinctly:
“The framework helps airlines look at payments holistically, enabling airlines to make decisions with the same rigour applied to other strategic areas and to track performance over time. Essentially the framework is a common lens through which commercial, finance, treasury, digital, and technology teams can efficiently evaluate payment options together. This avoids fragmented decisions that may serve one purpose but compromise others.”
That final observation identifies the industry’s underlying problem.
Payment decisions have traditionally been made in organisational silos.
The commercial team wants the highest conversion rate. Finance wants the lowest processing cost. Treasury focuses on settlement speed and cash flow. Fraud teams prioritise risk reduction. Technology departments seek the easiest system integration.
Every objective is legitimate.
But when each department optimises for its own priorities in isolation, the overall customer experience often becomes the casualty.
A payment method that reduces processing costs may increase transaction failures. A fraud-control measure that strengthens security may introduce enough friction to discourage legitimate customers. A technically convenient solution may fail to support the payment preferences of high-value international travellers.
The result is a booking journey that is efficient for internal departments but increasingly frustrating for passengers.
This is precisely what the IATA framework seeks to prevent. Rather than asking each department to optimise its own metric, it encourages airlines to measure payment performance as a strategic capability—balancing conversion, customer experience, cost efficiency, settlement speed, fraud management, and technological flexibility within a single decision-making framework.
For the tourism industry, this shift matters far beyond airline boardrooms.
Every successful payment is the beginning of a visitor journey. Every failed payment is a potential holiday, business trip, conference, or family reunion that never materialises.
Destination marketing organisations invest millions persuading travellers to choose their destinations. Hotels refine pricing strategies to improve occupancy. Airlines expand route networks to stimulate demand. Governments negotiate air service agreements and visa reforms to improve accessibility.
Yet all of those investments depend on one final moment: the traveller successfully completing the payment.
Viewed through that lens, payment strategy is no longer simply an airline operational issue. It is tourism infrastructure. Airlines that treat payments as a strategic capability rather than a back-office cost centre will convert more travel intent into confirmed bookings, generate stronger ancillary revenue, and ultimately deliver more visitors into the destinations that depend on them.
That is why IATA’s new framework deserves attention well beyond the aviation industry. It is a blueprint for improving one of the most overlooked conversion points in the entire global tourism economy.
Modern Airline Retailing and Tourism’s Next Competitive Advantage
Careen’s opinion piece places the payment framework within the broader transformation of Modern Airline Retailing — the industry’s shift towards more personalised, dynamic, and direct airline-to-consumer relationships enabled by IATA’s New Distribution Capability (NDC) standards and next-generation retailing architecture.
As Careen puts it:
“In the world of modern airline retailing, payment is no longer a back-office function. It is a strategic capability that influences whether a sale succeeds, how customers experience the airline, and how effectively revenue is converted into cash.”
That observation extends well beyond aviation.
For tourism professionals, airline retailing is not simply about selling seats more intelligently. It shapes the traveller’s very first experience of a destination. Long before a guest checks into a hotel, boards a cruise, or visits a landmark, they experience the destination through the airline booking journey. Every interaction during that process influences confidence, convenience, and ultimately the likelihood that a trip goes ahead.
Modern airline retailing promises personalised offers, dynamic pricing, seamless distribution, and increasingly intelligent customer experiences. But those innovations achieve little if the final step of the transaction fails.
An airline can invest millions in AI-driven merchandising, personalised bundles, dynamic offers, and omnichannel retailing. If its payment infrastructure still fails one in six ancillary transactions, its retail transformation remains incomplete. It has redesigned the storefront while leaving the checkout unreliable.
For the wider tourism economy, the consequences are equally significant.
Every failed payment is more than a failed airline transaction. It is a hotel booking that may never happen. A restaurant reservation that is never made. A guided tour that is never purchased. A destination that loses a visitor before the journey even begins.
This is why IATA’s new payment framework deserves the attention of destination management organisations, tourism ministries, hospitality groups, and travel investors—not just airline executives.
The industry’s future competitiveness will depend increasingly on removing every source of friction between travel intent and confirmed travel. Visa systems are becoming digital. Airports are becoming biometric. Airline retailing is becoming personalised. Payments must evolve at the same pace.
Tourism Reporter has consistently argued that the visitor economy is only as strong as its weakest operational link.
Right now, one of those weakest links sits at the checkout.
Fixing it is not simply an aviation priority.
It is one of the most commercially important tourism investments the industry can make.
Source: This analysis is based on IATA’s opinion paper, Why Airlines Need a New Approach to Payment, authored by Nick Careen, IATA Senior Vice President, Operations, Safety and Security, and published on 3 August 2026. It also draws on IATA’s Airline Payment Framework – Management Foundation and findings from the IATA 2025 Global Passenger Survey. Additional information is available at IATA.org.
Spread the Word:
Discover more from Tourism Reporter
Subscribe to get the latest posts sent to your email.