Payments company Thredd is leveraging Mastercard’s network to give its travel agency clients a more efficient way to conduct international transactions.
Online travel agencies (OTAs) such as Expedia or Airbnb face unique payments hurdles due to the nature of the industry. These companies often reserve hotel rooms or airline seats based on partial payments—transactions that carry a substantial risk of changes or cancellations.
These challenges are compounded in global travel, where cross-border payments bring their own complications: higher fees, longer payment settlements, and regulatory roadblocks have been longstanding pain points.
To solve for these issues, 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.
Challenging Trust
Establishing trust in the travel industry can be a substantial challenge because OTAs have thousands of suppliers—every hotel, airline, cruise line, and rental car company is a potential client.
OTAs also have to build trust with their customers. Global travelers are increasingly concerned about the security of their payments. Data from Outpayce found that more than 70% of respondents prefer to book with travel companies known for secure payment processes.
Struggling to Support
These security concerns are driven by both cross-border complexities and the rising threat of fraud. However, there is another issue for travel companies: the sheer number of payment types that have emerged in recent years. In addition to the many local currencies, there are now real-time payments systems, stablecoins, CBDCs, and other digital payment methods.
This has led to a fragmented cross-border payment landscape, where many consumers have been forced to rely on multiple payment types to make global transactions.
This is also an issue for travel companies. A separate survey from Airwallex and Skift found that travel agencies struggle to support the wide range of payment methods available to their customers. Additionally, many respondents said their profit margins had been impacted by inefficient payment systems—a factor that is driving most travel companies to explore payments modernization.
The post Thredd and Mastercard Launch Custom Cross-Border Payments for Travel appeared first on PaymentsJournal.
