Nowadays, the travel industry is one of the most important industries of the planet. According to the World Tourism Organisation (UNWTO), tourism has grown above average, at around 4% per year, for eight straight years, becoming the third biggest world’s sector. In 2017, international tourism reached $1,340 billion. Only in Spain, international tourism reached $68 billion, being the second country with more profit in 2017.
While tourism has continuously grown, many administrative daily processes remain obsolete. The invoicing system was one example, where manual procedures and reconciliation made work harder and disrupted the cash flow. Nowadays, the system has been digitised and streamlined with electronic billing.
Currently, electronic B2B payments are one of the main paint points of the industry, as there isn’t a specific payment channel to cover the needs and bring innovation, agility and security to the sector. In addition, as there are many actors involved in the process, it is a challenge to create a secure and flawless cash flow.
B2B Payment methods and weaknesses
These are some pain points of the payment methods between companies in the travel industry:
- Fax transmission of credit cards, which increases manual procedures, connexion errors and PCI security breaches.
- Administrative costs: most credit cards are processed manually, increasing human errors and chargebacks.
- Card fees: credit card processing fees range from 2 to 3% and can also involve conversion fees and cross-border fees on top of these.
- Breakage: forgetting to charge a card or undercharging accounts for an additional 2% of net revenue in some occasions.
- Ad-hoc hidden costs: unexpected administrative costs to process certain credit cards can make card fees to go over 10%.
- Billback: delays or cancellations which affect companies’ cash flow.
- Limited currency support: CC issuers only support limited currency subsets which results in extra conversion fees or cross-border fees.
In front of this situation, the Hotel Electronic Distribution Network Association (HEDNA), in collaboration with Voxel Group and 50 other companies of the travel industry, have created the Open Payment Alliance (OPA). The purpose of it is to create a payment standard that streamlines the processes and payment methods of the travel industry, and make a more efficient cash flow for the industry.
In Voxel Group, we have developed technological solutions for 20 years to simplify, automate and digitalise the back office processes. With this new alliance, we want to create an innovative system to streamline the payment flow in the travel industry.