Embedded Finance Takes Off – Capturing the US $100 B Opportunity in Travel Payments
Airlines and travel brands spend billions each year on card-processing fees and still lose bookings when customers cannot pay the way they want. Embedded finance—BNPL instalments, account-to-account (A2A) transfers, multi-currency wallets and micro-insurance—changes that equation. Research values embedded financial services in travel at more than US $100 billion today and forecasts compound growth above 20 per cent a year over the next decade. By weaving payment innovation directly into the booking flow, carriers can cut costs, raise conversion and create entirely new revenue streams. Here is a concise roadmap to seize the opportunity.
Why Embedded Finance Matters Now
- Cost pressure: Card fees, currency mark-ups and chargebacks drain up to three per cent of topline revenue.
- Conversion friction: Shoppers abandon baskets when local payment methods or instalments are missing—especially on high-fare routes.
- New revenue layers: BNPL interest, FX spreads, wallet top-up fees and bite-size insurance premiums deliver fresh, margin-rich cash flow.
- Regulatory tailwind: Open-banking mandates in Europe, India’s UPI rails and instant-payment platforms such as FedNow lower technical and compliance barriers.
Four Embedded-Finance Playbooks
- BNPL Ticket Instalments
Split-payment plans move high-fare bookings earlier in a traveller’s decision cycle and increase average order value. Airlines in Asia-Pacific report up to 30 per cent higher conversion when BNPL is offered at checkout. - Account-to-Account Payments
Direct bank transfers via open-banking APIs can slash processing fees by 50–70 basis points. Instant settlement also improves cash flow and reduces fraud. - Multi-Currency Travel Wallets
Digital wallets that hold multiple currencies allow travellers to lock in FX rates, pay on board and top up ancillary purchases in one tap—all while the airline shares in spread income. - Contextual Micro-Insurance
Baggage cover, flight-delay cash and trip-cancellation protection sold in-path create high-margin add-ons with minimal operational burden when fulfilled through insur-tech partners.
A Practical Implementation Path
Step 1—Audit Pain Points
Identify routes with high abandonment, high chargeback ratios or large FX leakages. Prioritise them for embedded-payment fixes.
Step 2—Select Fintech Partners
Choose PSPs or BNPL providers with proven travel risk models and robust regulatory licences in target markets.
Step 3—Integrate Seamlessly
Embed payment options in the booking API—not via redirection pages—to preserve brand trust and data ownership.
Step 4—Educate and Incentivise
Use checkout banners, loyalty-point bonuses or limited-time fee waivers to drive uptake without discounting base fares.
Step 5—Monitor and Optimise
Track conversion lift, fee savings and ancillary revenue per passenger; redeploy wins to new markets every quarter.
How Travesla Accelerates Success
- Fintech Sourcing: We vet BNPL, wallet and insurance partners for credit risk, cross-border settlement and regulatory compliance.
- Channel Distribution: Our 2 850-agency network promotes new payment options to leisure and corporate bookers alike.
- Regulatory Shield: Travesla navigates PSD3, PCI-DSS, RBI and local data-privacy rules, ensuring smooth launches in complex regions.
- Performance Analytics: Real-time dashboards benchmark fee savings and new-revenue share, allowing swift optimisation.
Conclusion
Embedded finance transforms payment from a cost centre into a profit centre. Airlines and travel brands that embed instalments, A2A rails, wallets and micro-insurance directly into the booking journey realise higher conversion, lower fees and fresh ancillary income. Partner with Travesla to design, integrate and scale embedded-finance tools that keep travellers booking—and your margins climbing.
Author’s Bio
Salil Nath is the Founder and CEO of Travesla. Over twenty years at Kingfisher Airlines, Amex Global Business Travel and Etihad Airways, he has led co-branded card launches, BNPL pilots and multi-currency wallet integrations that collectively processed more than US $2 billion in travel spend. A regular speaker at CAPA, IATA Financial Symposium and Phocuswright, Salil advises airlines on turning payment innovation into sustainable margin growth. His leadership mantra—“large enough to lead, small enough to care”—underpins Travesla’s hands-on approach to embedded finance.
Sources
Reserve Bank of India, UPI Annual Report, 2024.
Global Market Insights, Embedded Finance Market Size Report, 2024.
Precedence Research, Embedded Finance in Travel Forecast 2024–2034.
Accenture, Payments 2025: The Future of BNPL in Travel, 2024.
Worldpay, Global Payments Report, 2024.
McKinsey, The Economics of Open-Banking Payments, 2023.
Uplift/Amadeus, BNPL Conversion Impact Study, 2023.
IATA, Financial Services Cost Benchmark, 2024.
SITA, Travel Payment and Biometrics Convergence, 2024.
FedNow Service, Launch Overview, 2023.
Salil Nath