The cost of processing payments for airlines and travel businesses in 2026

Airlines spent $24.5 billion processing payments in 2025, according to IATA. That bill covered $1.05 trillion in sales and grew faster than revenue over the past two years. Travel agents, tour operators and booking platforms face similar cost drivers, from card fees to chargebacks. This guide explains what makes up those costs and what travel businesses can do about them in 2026.

What IATA's 2026 data shows about airline payment costs

IATA's October 2026 data shows payment costs rising 10.4% between 2023 and 2025. Travel sales grew 7.7% over the same period, so payments are taking a larger share of every booking. IATA also found the average payment cost per passenger now exceeds forecast net profit per passenger.

Of the $24.5 billion total, $20.7 billion went on payment fees: the direct cost of completing each transaction. A further $2.9 billion covered airline operating costs, including payment systems, delayed cash flow, staff and compliance. The remaining $0.9 billion was lost to fraud or uncollected sales.

IATA's interim Director General and CFO, Sandrine Le Borgne, called costs growing faster than revenue "unsustainable". Cards carried the highest cost per transaction of any payment method in the data. That matters because cards still dominate how passengers pay for travel.

What makes up the cost of a travel payment

Every card payment carries several layers of cost. Interchange is paid to the cardholder’s bank and is the only regulated cost for most UK consumer cards. Scheme fees cover use of the Visa or Mastercard networks, whilst processing fees are the payment provider’s own charge. On top sit operational costs, such as reconciliation and delayed cash flow, plus losses from fraud and chargebacks.

How a provider packages these fees depends on its pricing model. There are three main models to understand: flat-rate, interchange-plus and volume-based.

Flat-rate pricing

Flat-rate pricing charges the same fee on every transaction, whatever the card type or volume. It is simple to understand and easy to forecast, which suits businesses that want a predictable bill. The provider absorbs the difference between cheaper and more expensive cards within that single rate.

Interchange-plus pricing

Interchange-plus pricing passes interchange and scheme fees through at cost, then adds the provider’s own processing fee. Each statement shows what the card schemes charged and what the provider charged. That gives a detailed view of costs, though the total varies with the mix of cards a business accepts.

Volume-based pricing

Volume-based pricing links fees to the amount a business processes, so pricing changes as volumes grow. It suits travel businesses with large or seasonal booking volumes that want costs to reflect their scale. Our guide to embedded payment fees in Europe explains each fee type in more detail.

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Why travel payments cost more than most sectors

Travel shares the same fee layers as any other business, but several features of the industry push costs higher. Most come down to timing, geography and the way customers pay for trips.

Deferred delivery and held funds

A customer often books months before they travel, so the business is paid long before it delivers. If the business stopped trading in between, the payment provider could face refund claims and chargebacks. To manage that risk, providers often hold back part of each payment as a reserve or delay settlement.

Reserves are not a fee, but money held by a provider cannot pay suppliers, staff or marketing. That is why IATA counts delayed cash flow as part of its operating costs.

Cancellations, refunds and chargebacks

Travel plans change, and disruption from weather, strikes or schedule changes is common. When a refund is slow or disputed, customers often raise a chargeback with their bank instead. Each chargeback carries a fee and admin time, and a high dispute rate can lead providers to raise reserves.

The dispute window also runs from the travel date, not the booking date. A trip booked far in advance can therefore stay open to chargebacks for well over a year after payment.

Cross-border and commercial cards

Travel businesses often take many payments from overseas cards, which usually cost more to accept than domestic ones. Since Brexit, interchange on online payments between the UK and the EEA has risen sharply. Corporate and commercial cards, common in business travel, also sit outside the UK's interchange caps.

Failed payments and lost revenue

Payment costs are not only about fees. IATA's 2025 Global Passenger Survey found 17% of travellers buying an extra bag or seat could not complete it. The first payment had failed and no other method was offered.

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How UK regulation affects travel payment costs in 2026

UK caps limit interchange on consumer debit and credit cards, with a lower cap for debit. These caps do not cover commercial cards or most payments from cards issued outside the UK. For travel businesses with many international and corporate customers, a large part of the card bill sits outside the caps.

The Payment Systems Regulator has been working to change that for UK and EEA online payments. In January 2026, the High Court upheld the regulator's power to cap cross-border interchange fees. The level and timing of that cap had not been confirmed at the time of writing.

The regulator is also moving into the Financial Conduct Authority, with work on card fees continuing during the transition. Travel businesses should watch both changes, since they could shift the cost of accepting European cards. Our guide to cross-border payment processing covers the wider picture.

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How airlines are responding to rising payment costs

IATA's main recommendation is to offer passengers lower-cost alternatives to cards. Its 2025 survey found 29% of passengers prefer a digital wallet, whilst 8% prefer a local instant payment method. IATA Pay, its own instant payment option, is now live in 34 countries across 38 payment schemes.

IATA also wants clearer pricing on agency cards within its Billing and Settlement Plan. That plan settles payments between airlines and travel agents. This lets airlines decide whether to accept an agency card or a lower-cost alternative. A new Airline Payment Framework helps airlines weigh cost, customer experience and cash flow when choosing payment methods.

The underlying message is that payment choices now affect revenue as much as cost. IATA estimates one in five ancillary purchase attempts go unfinished because a refused payment had no alternative.

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What travel businesses can do to reduce payment costs

Start by breaking down the full cost of each payment, not just the headline rate. That means separating interchange, scheme and processing fees, then adding chargebacks, reserves and failed payments. For some travel businesses, held funds and disputes weigh as heavily as fees.

Next, look at the payment methods on offer. Digital wallets such as Apple Pay and Google Pay often bring stronger authentication, which can reduce fraud and disputes. Offering a second method when a card fails can also recover bookings that would otherwise be lost.

Clear cancellation and refund communication can reduce chargebacks, since customers who know what to expect have less reason to dispute. Strong Customer Authentication through 3D Secure also shifts liability for many fraud claims away from the business. Our guide to PSD2 explains how this works.

Finally, review your pricing model as volumes grow. Flat-rate pricing is simple to understand, whilst volume-based pricing changes with the amount a business processes. For booking platforms paying several suppliers, payments that split automatically also reduce reconciliation work.

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How Ryft supports travel businesses

Ryft is an FCA-authorised payment institution, serving businesses across the UK and Europe. Travel businesses, including Daytrip, already process their payments with Ryft. Ryft offers volume-based pricing, with Apple Pay, Google Pay and fraud screening built in.

For booking platforms and travel marketplaces, Ryft's split payment functionality routes each supplier's share automatically at the point of payment. Talk to our team to review the full cost of your travel payments.

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