Here is a number the aviation industry rarely talks about: airlines worldwide lose an estimated US$6 billion annually to payment failures. Not to empty seats. Not to fuel volatility. To payments.
A passenger books a flight from Jakarta to Dubai. Their card gets declined. Not because they lack funds, but because the airline’s single acquirer has no relationship with Indonesian issuers. The passenger tries again, faces a 3DS challenge they do not understand, abandons the booking, and flies with a competitor instead. The airline never knew the customer was ready to pay.
This is not a hypothetical. It plays out millions of times a year across the global aviation industry. And unlike yield management or fuel hedging, areas that receive enormous investment and attention, payment infrastructure remains one of the most underfunded, underengineered parts of airline operations. That is starting to change. But not fast enough.
The invisible revenue problem
Airlines operate with famously thin margins, often two to five per cent net on a good year. At that margin profile, a 10 per cent payment decline rate is not just inconvenient. It is existential. Yet the industry average for cross-border card declines sits between 15–25 per cent, and in markets dominated by local payment methods, that number climbs higher still.
What looks like a payment failure from the outside is actually a cascade of compounding problems: a card issued in Malaysia being processed by a European acquirer with no local relationship; a risk engine calibrated for domestic fraud patterns firing false positives on legitimate cross-border bookings; a 3DS flow that works fine on desktop but breaks the mobile checkout journey.
The table above is conservative. In markets where local payment methods are the primary way people transact: GoPay and OVO in Indonesia, Mada and STC Pay in Saudi Arabia, PromptPay in Thailand, an airline that accepts only international cards is structurally invisible to a large portion of its addressable market. That is not a payment problem. That is a market access problem.
The complexity airlines were not built to handle
To understand why airline payments fail so often, you need to understand the unique complexity stack airlines operate within. No other vertical faces quite this combination.
Airlines sell globally but settle locally. A single booking may involve a passenger in Singapore, an origin airport in Australia, a destination in Japan, a codeshare partner in the Middle East, and interline settlement through IATA’s BSP. The payment that funds all of this needs to work flawlessly across multiple currencies, regulatory regimes, and financial relationships — in real time.
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At the same time, the distribution landscape has fragmented. Airlines now sell through their own direct channels, through OTAs, through NDC-connected travel management companies, and through GDS. Each channel has different payment capabilities, different fraud profiles, and different customer expectations. A payment infrastructure designed for one channel will fail on the others.
What smart retry alone can recover
Here is something that surprises most airline finance and revenue leaders when they first see it: 20-40 per cent of declined transactions are recoverable. The customer was willing to pay. The card was valid. The money was there. The system just failed to capture it.
Smart retry logic, the ability to automatically reattempt a failed transaction through a different acquirer, with modified parameters, within seconds, is table stakes in e-commerce. It is standard practice at any sophisticated online retailer. In aviation, it remains uncommon.
The reason is integration complexity. Routing a transaction to a different acquirer requires relationships with multiple PSPs, a real-time decision engine that can assess why a transaction failed and select the optimal retry path, and integration with the PSS in a way that does not disrupt the booking flow. Building all of that in-house is a multi-year engineering project. Most airlines do not have the team for it.
This is precisely where orchestration changes the equation. A payment orchestration layer sits between the airline’s booking system and the payment ecosystem, providing a single integration point that unlocks access to multiple acquirers, retry intelligence, and local payment methods simultaneously. The airline gets years of infrastructure in weeks of integration.
The local payment method gap is a market access problem
In 2024, approximately 48 per cent of e-commerce transactions in Southeast Asia were completed using local payment methods: wallets, bank transfers, and local card schemes, rather than international cards. In Saudi Arabia and the UAE, the share of local payment instruments has grown substantially as domestic schemes like Mada have matured.
An airline that operates routes into these markets but does not support local payment methods is not just leaving money on the table. It is effectively pricing itself out of the market for a growing segment of travellers who prefer or exclusively use local payment instruments.
The integration challenge is real. Adding GoPay requires a different technical integration than adding Mada. Each has its own API, its own settlement model, its own compliance requirements. For an airline managing a single PSS integration, adding ten local payment methods across five markets represents a significant engineering investment – and ongoing maintenance overhead.
The orchestration model solves this with a hub-and-spoke architecture: the airline integrates once with the orchestration layer, which maintains and manages all individual payment method integrations. When regulations change or a new wallet gains market share, the orchestration layer updates. The airline does not need to re-engineer its checkout.
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3DS: The necessary friction that became unnecessary friction
Strong Customer Authentication (SCA) and 3DS2 are necessary tools. They reduce fraud and protect airlines from chargebacks. But calibrated incorrectly, they become conversion killers.
The core tension is this: 3DS challenges add friction to the checkout flow. Every additional step: a redirect, an OTP, an app-based authentication, creates an opportunity for abandonment. Studies across e-commerce consistently show that conversion drops 10–20 per cent when a 3DS challenge is presented versus when it is not.
The solution is not to remove the 3DS. It is to apply it intelligently. Modern 3DS2 supports frictionless flows – where the issuer authenticates the transaction in the background without user interaction – for low-risk transactions. The trigger for a frictionless flow is rich data: device fingerprinting, transaction history, and behavioural signals. An airline that passes comprehensive contextual data through the 3DS process can dramatically increase its frictionless rate without increasing fraud exposure.
Most airline payment systems do not pass this data. They send the minimum required fields and accept whatever authentication outcome comes back. The result is unnecessary challenges to legitimate transactions, unnecessary abandonment, and unnecessary revenue loss.
The orchestration answer
Payment orchestration is not a new concept in e-commerce. The world’s leading online businesses – including several of the largest travel OTAs – have been running orchestration layers for years. For airlines, it is still early. But the early movers are seeing results.
What a mature orchestration layer delivers for an airline:
- Multi-acquirer routing with automatic failover – no single point of payment failure
- Intelligent retry that recovers 20-40 per cent of initially declined transactions
- Local payment method coverage across all key markets via a single integration
- Market-specific 3DS logic that maximises frictionless authentication
- Real-time analytics on payment performance by route, market, and payment method
- Compliance management across different regulatory regimes
The shift from a single-acquirer model to an orchestrated payment infrastructure is not just a technology upgrade. It is a revenue recovery exercise. For a mid-sized airline processing US$2 billion in annual ticket revenue, a three per cent improvement in payment conversion rate is US$60 million. A one per cent reduction in the decline rate on cross-border transactions is US$20 million. These are not speculative numbers – they are the figures airlines are actually realising when they make the switch.
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What airlines should do now
The path forward is not complicated, but it requires leadership alignment between finance, technology, and commercial teams – groups that do not always sit at the same table when payment infrastructure decisions are made.
First: audit your current payment performance. What is your decline rate by market? By payment method? By booking channel? Most airlines cannot answer these questions with granularity because their PSS reporting was not built to surface payment intelligence. If you cannot measure it, you cannot improve it.
Second: map your addressable market against your payment method coverage. If you fly routes into Indonesia, Malaysia, Saudi Arabia, or Thailand, and you do not support the dominant local payment methods in those markets, you have a quantifiable market access gap. That gap has a dollar value. Make it visible to your commercial leadership.
Third: evaluate orchestration as a strategic capability, not a vendor conversation. The question is not which payment gateway to work with. The question is whether your payment infrastructure is architected for resilience, intelligence, and flexibility – or whether you are one acquirer outage away from a catastrophic revenue event.
The airlines that win the next decade will not just be the ones with the best routes or the most frequent flyer programmes. They will be the ones who can sell to anyone, anywhere, in any payment method, without losing the transaction. That capability is available today. The question is whether you will build it before your competitor does.
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