L3 Payments Blog

Does L3 Payments Process for Travel Companies?

Written by The L3 Payments Team | Jan 12, 2022 5:00:00 PM

We do! We also offer high-quality solutions to facilitate all your payment processing needs. But what do travel companies need to know about processing payments?

The travel industry has faced unique processing challenges due to the COVID-19 pandemic. Because many countries shut their borders to mitigate the risk of spreading the virus—making traveling less accessible—the travel industry came to a halt.

The fallout of this meant that revenue also came to a halt, customers issued chargebacks, the number of complaints skyrocketed, there was an unequivocally high number of refund requests, and those in the industry had to work overtime to satisfy customer demands.

In this article, we’ll discuss:

  • What are travel companies?
  • What are some of the challenges in travel processing?
  • What might the future of the travel industry look like after the COVID-19 pandemic?
  • Adapting to the new world as a travel company
  • Which travel categories do L3 work with?

Without further ado, let’s dive in!

What are travel companies?

Let’s keep this part short and sweet.

There are many different travel companies. These include:

  • Airline
  • Vacation booking
  • Travel agents
  • Travel insurance
  • Online travel agents (OTAs)

You’re likely reading this article because you belong to one of these categories. We’ll dive into more of the nitty-gritty and answer some pressing questions about payment processing in the travel industry. 

If you have any additional questions about travel processing, feel free to reach out to one of our payment experts who’ll be more than happy to assist you!

What are some of the challenges in travel processing?

The travel industry faces many challenges, and processing is one of them. It can be especially difficult because the industry’s landscape is always changing—sometimes drastically (thanks, COVID-19!). However, it’s not the first time the industry has had to overcome disaster. 

For example—in the wake of 9/11—fewer people booked flights out of fear, and increased levels of security meant going through airports became more stressful. However, the industry did recover. 

So, with COVID-19 still circulating—having given rise to a so-called “new normal”—there are more challenges for the industry to overcome. Let’s explore some new and old challenges for payment processing in the travel industry.

    • Trips are more likely to be canceled than ever before. In December 2021, 3,650 flights were canceled in just three days due to short staffing caused by the rapidly-spreading Omicron variant of COVID-19. It’s essential to adapt to the increasing likelihood of cancellations.
  • Increased number of refunds. Because of the pandemic, the travel industry had to refund many customers in 2020 and 2021. This caused a backlog in calls to all aspects of the industry, from airlines to hotels to travel bookers. And there were millions of dollars at stake
  • Tip: Try to simplify the refund process. If the industry can achieve this, everything will become smoother for customers and the industry at large.
  • Groups that travel together may want to split up payments, especially now that money is tight (and the Great Resignation is upon us). People that travel with friends or family may want to split the costs of travel activities, especially as these activities can get quite expensive. Traditionally, one person might take a hit on their card. Many consumers are familiar with one friend paying and the rest transferring their share via services like Venmo. However, from a merchant perspective, these conditions—higher total sale amount, multiple parties, and financial considerations—create a greater risk of refund or chargeback requests.
  • Offering payments to international customers. As travel is often international, it’s essential to give people in—for example—Nigeria the same experience as people in the US.
  • Increased acceptance of different payment methods. Also included is to have payment methods that can facilitate multiple countries. Although the big card brands are predominantly used for global transactions, there are plenty of counterexamples. For example, Chinese tourists often want to pay through WeChat using their cellphones in the US. 

If some of the above processes become more seamless for the customer,their experiences will be better and they’ll likely travel using your services more.

People’s habits change over time, so the payment industry must be flexible to facilitate this. It’s an evolve or fade away type of thing. 

Therefore, new payment options will likely arise—like a buy now, pay later type of system—according to PYMNTS.com. More flexible options help the travel industry boom once again. 

What might the future of the travel industry look like after the COVID-19 pandemic?

As we’ve explored already, the COVID-19 pandemic has changed the trajectory of the travel industry. From travel bans, countries shutting down borders, flight cancellations, flights not having passengers sit next to each other, and differing testing requirements by country, the world is a different place than before the pandemic. 

According to a UN report, 2020 was the worst year on record for tourism. However, travel is a resilient industry and those who adapt alongside it can thrive again. People will travel in large numbers again. Remember, it flourished again after 9/11, and again after the Great Recession

In 2008, because unemployment was high, lots of people had to find different ways to make money. Therefore, the gig economy exploded into life. 

Part of the gig economy gave rise to companies like Uber and Airbnb, revolutionizing the travel industry from how we hired rides to where we stayed when on vacation.  

Adapting to the new world as a travel company

But how can you ensure that you adapt to the new world as a travel company? Let’s explore a few ideas.

  • Put customers first. This is the most important thing to focus on. Customers are looking for an optimal experience when traveling, so make sure customer experience is at the forefront of your business. Marketing, engaging in your local community, and finding ways to help with COVID-19 (offer hotel rooms to workers, for example) can all help you build ties with your community. Increase awareness of your brand, and let people know your services are there for them despite the pandemic (or once the pandemic becomes endemic).
  • Ensure your customer service team is easy to reach, and make it digital. As travel has increased again, call centers are now being overwhelmed. If you use digital methods for booking and complaints, you’ll have a more optimal service. Ensure that you empathize with your customers, build better trust, and improve your services. If you want to get repeat customers, make sure you offer them a great experience.
  • Understand your new competition. Competition has changed. Rules for COVID-19 vary by country, and many national and international policies change in real-time based on community spread. Adaption is crucial here. Look to offer new products, understand the new market, and—as mentioned—focus on your customers.
  • Prioritize hygiene. Hygiene is becoming a requirement for travel, not a bonus. Some airlines give out sanitizing wipes as people board planes. No-touch sanitizers and other options are increasingly utilized in public places like airports and hotel lobbies. Perhaps ensure contactless payments are available, and things like entries into hotel rooms are keyless and contractless. The more things are digitized, the fewer things have to be passed from person-to-person! 

Which travel categories do L3 work with?

Banks deem the travel industry as high risk. But don’t let the term “high-risk” frighten you—it’s not really a bad thing. While certain segments of travel do historically have a higher likelihood of chargebacks, refunds, and general customer dissatisfaction, there is a myriad of best practices to help mitigate these instances.

Let’s discuss a case study. In November 2020, one of our payments experts was discussing payment options with the owner of an OTA. He asked them to lay out the near-term market positives and challenges.

The representative discussed international borders opening up, particularly Australia’s. However, they understood that the entire industry could change again when the next COVID-19 variant hit. And what happened? The way-more-transmissible omicron variant. 

Online travel agencies and travel insurance in particular must adhere to best practices around chargeback mitigation and work with merchant banks who understand the risks and challenges associated with their business.

Final word

We know this is a lot to think about. L3 Payments regularly works with high-risk merchants, and this includes all travel industries. 

In short:

  • L3 has multiple partner banks working with travel companies of all sorts.
  • L3 successfully helps travel merchants like you navigate payment processing challenges with chargeback reduction, business intelligence, and a consultative approach that’s customized based on the specific needs of your business.


Therefore—no matter what aspect of the industry you work in—we’re here to assist you. Feel free to reach out to one of our experts to discuss the travel industry further and how better payment processing can help your business!