High transaction fees, slow settlements, and fraud risks can turn a smooth booking process into a financial headache for travel businesses. That’s where open banking in the UK travel sector is changing the game.
Instead of relying on traditional card payments with their hidden fees and frustrating delays, Open Banking allows customers to pay directly from their bank accounts—quickly, securely, and with lower costs. This means instant transactions, reduced processing fees, and fewer disputes, making it an ideal choice for airlines, hotels, travel agencies, and tour operators looking to improve efficiency and profitability.
Let’s explore how open banking is reshaping the UK travel industry and why it’s time for businesses to take advantage of it.
The biggest payment challenges in the travel industry
The travel sector has long been heavily dependent on traditional payment methods, but these come with several pain points that impact both businesses and customers:
- High processing fees: Every card transaction involves fees from multiple parties, cutting into profit margins.
- Slow settlement: Many businesses wait 2-3 days (or longer) for funds to clear, affecting cash flow.
- Chargebacks & fraud risks: Travel businesses are often hit with chargebacks from cancellations and fraud-related disputes, which result in financial losses and extra admin work.
- Complex refund processes: Traditional refunds through card payments can take days to process, frustrating customers and creating operational headaches.
With travel businesses already operating on tight margins, these inefficiencies cost both time and money. Open banking offers a smarter alternative.
How open banking solves these issues
Open banking in the UK travel sector helps businesses cut costs, speed up payments, and reduce fraud. Here’s how:
1. Lower transaction fees
Card transactions involve multiple middlemen—banks, card networks, and payment processors—all taking a slice of each payment. Open banking bypasses these costly intermediaries, reducing transaction fees by up to 50% compared to traditional card payments.
2. Instant payments & faster refunds
Waiting days for payments to settle is a common frustration in the travel industry. Open banking enables real-time payments, meaning businesses receive funds immediately. This also applies to refunds, reducing wait times for customers and improving their booking experience.
3. Stronger fraud protection & fewer chargebacks
Fraud and chargebacks are a major issue for travel businesses, particularly for online bookings. With open banking, payments are authenticated directly through the customer’s banking app, reducing fraud risks. Since payments are verified in real time, chargebacks are practically eliminated—saving businesses thousands in dispute costs.
4. Secure & compliant transactions
Payment providers process all open banking payments using bank-level security, ensuring full compliance with UK financial regulations, including PSD2 (Payment Services Directive 2). This allows businesses to accept payments with confidence, knowing that transactions are fully protected.
Real-world use cases: Open banking in action
Several prominent travel companies have adopted open banking to enhance their payment processes:
- Booking.com: This leading online travel agency is using open banking solutions to offer customers more flexible and secure payment options, enhancing the overall booking experience.
- Wizz Air: The low-cost European airline has embraced open banking to reduce transaction fees and improve payment processing times.
- Air France: The French flag carrier has implemented open banking to offer instant payments and reduce fraud risks.
- Stena Line: One of the world’s largest ferry operators, Stena Line has adopted Open Banking to enhance payment efficiency and customer satisfaction.
The future of open banking in the travel industry
Experts expect the travel sector to adopt open banking rapidly over the next few years. The UK’s Competition and Markets Authority (CMA) has been actively supporting open banking initiatives to increase competition and drive innovation.
As more businesses move away from costly card networks, we can expect to see:
- More seamless payment experiences integrated into booking platforms.
- Wider adoption across international travel operators.
- New features such as Request to Pay, allowing businesses to send payment requests directly through open banking.
Regulators and advancements in payment technology are setting open banking to become a standard payment method for UK travel businesses.
Start with Open Banking Today: Here’s How You Can Do It
If you’re looking to cut payment costs, speed up transactions, and improve security without disrupting your current business operations, open banking is the way forward. Thousands of UK businesses are already benefiting—shouldn’t yours be next?
Atoa Instant Bank Pay offers an instant payment solution that allows customers to pay you in-store or remotely from their own bank app, making it easier than cash and cheaper than card fees.
Book a demo today and enjoy a 7-day free trial with no strings attached. Experience firsthand how Atoa can transform the way your travel business handles payments, even before you commit to the service.
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