Payment Trends we are watching as the transition to Offer-Orders takes off
The airline industry is undergoing a significant transformation with the rise of the offer-order trend. This piece explores the latest payment trends that are shaping the industry and how they align with the flexibility and user-friendliness of modern airline systems. While there are numerous innovations in payment methods, we focus here on the trends that we believe will draw significant attention from airline Chief Commercial Officers (CCOs) over the course of 2025. By understanding these trends, airlines can encourage discretionary purchases, increase overall shopping cart size, and streamline operations.
The Connection Between Offer-Order and Payments
The connection between the offer-order trend and payment methods may not be immediately obvious. The transition from Passenger Name Records (PNRs) and tickets to orders does not necessarily mandate changes to the forms of payment. However, the broader goals of the offer-order trend—making products more personalised, easier to find, and readily transactable—naturally extend to payment transformation. As airlines strive to enhance customer experience by offering more tailored and accessible products, it becomes essential to align payment methods with these advancements.
Revisiting payment strategies in connection with the offer-order trend is crucial for enhancing customer experience and driving revenue. Flexible and user-friendly payment options can significantly impact customer satisfaction and loyalty. For instance, a study by IATA found that 70% of passengers prefer airlines that offer multiple payment options.[1] Additionally, the transition from traditional payment methods to more modern solutions can streamline operations and reduce transaction costs, further benefiting airlines.
The Payment Trends we are watching
While there are numerous innovations in the payment space, there are several that we believe will rise above the others either due to their potential impact or their novelty. These trends not only enhance the customer experience but also provide airlines with opportunities to increase revenue and streamline operations.
Digital Wallets
Digital wallets are becoming increasingly popular, especially in mobile app usage. They offer a convenient way for customers to purchase flights and ancillaries, making them a vital component of modern airline payment strategies. According to a report by Juniper Research, the number of digital wallet users is expected to reach 4.4 billion by 2025, representing a significant opportunity for airlines.[2] Airlines that integrate digital wallets into their payment systems can benefit from increased customer engagement and higher conversion rates. While this is important for the sale of flights, we believe digital wallets will be especially effective at driving the sale of discretionary ancillaries like paid seat assignments by reducing transactional friction.
Mastering Split Form of Payment
Split payments are essential in various scenarios where customers need to use multiple payment methods. For instance, a customer might not have enough credit limit on a single card and needs to split the payment across two or more cards. Another common scenario is when multiple passengers are on the same itinerary, and each wants to pay for their own ticket. Additionally, there are cases where a company is paying for the ticket, but the passenger wants to pay out of pocket for an ancillary service, such as a seat with more legroom. There are many other scenarios, all of which are difficult to handle in their own way.
The traditional PNR and ticketing system makes split payments challenging due to its rigid structure. PNRs and tickets are designed to handle single transactions, and accommodating multiple forms of payment requires complex workarounds. These workarounds often involve issuing separate accounting documents for each form of payment, which are then exchanged for tickets and/or Electronic Miscellaneous Documents (EMDs). This process is cumbersome and prone to errors, making it difficult to implement split payments efficiently.
The offer-order model, on the other hand, simplifies the process by allowing more flexibility in handling transactions. With offer-order, the backend systems can manage multiple payment methods more seamlessly, reducing the need for complex workarounds. This model also enables more straightforward integration of user experience layers that can handle various payment scenarios, making the process smoother for both airlines and customers.
The benefits of mastering split form of payment are significant. Airlines that offer this flexibility can cater to a broader customer base, including those who prefer to use a combination of credit cards, loyalty points, and digital wallets. This flexibility can lead to higher average transaction values and improved customer satisfaction. Additionally, it can enhance the overall shopping experience, encouraging customers to make more discretionary purchases and increasing the size of their overall shopping carts.
BNPL (Buy Now, Pay Later)
BNPL is gaining traction as it offers flexible repayment terms, allowing customers to make larger purchases without immediate financial strain. This trend has the potential to increase the average shopping cart size. According to a report by Accenture, BNPL transactions are expected to grow by 20% annually, reaching $680 billion by 2025.[3] Airlines that adopt BNPL solutions can attract price-sensitive customers and encourage them to book higher-value services, such as premium seats and additional baggage.
The main opportunity for BNPL is to increase the size of the average shopping cart. Not every customer has the credit limit or access to flexible and inexpensive repayment terms. BNPL helps these customers purchase more than they otherwise might. By offering BNPL options, airlines can cater to a broader customer base, including those who may not have the immediate funds to pay for higher-value services upfront.
Several BNPL providers, such as Affirm and FlexPay, have become prominent in the travel industry. These providers offer seamless integration with airline booking systems, making it easy for customers to choose BNPL as a payment option during the checkout process. This convenience can lead to higher conversion rates and increased customer satisfaction.
Cryptocurrencies
Cryptocurrencies are experiencing a resurgence, with financial institutions increasingly adopting them and regulatory support from world governments growing. According to a report by Triple-A, the global adoption of cryptocurrencies reached 562 million owners in 2024, a 34% increase from 2023.[4]
Bitcoin's market cap alone has also seen substantial growth, making it one of the most valuable assets in the world. As of 2024, Bitcoin's market cap of USD $2 trillion is larger than the value of all currencies held in reserve by world governments except for the US Dollar and Euro,[5] and about one ninth of the total market cap of gold.[6] Forecasts for 2025 suggest that the price of Bitcoin could double, creating a significant pool of new wealth.[7]
Beyond driving more revenue from an emerging customer base, cryptocurrencies also offer a level of security and transparency that traditional payment methods may lack, reducing the risk of fraud and chargebacks. Airlines like airBaltic have already gotten started with accepting crypto using services like BitPay. UATP and other credit card issuers also offer indirect ways to allow customers to fund their transactions with cryptocurrencies without requiring material changes to airline systems, albeit on more expensive credit and debit card rails.
Loyalty Currency on Blockchain
Airlines are exploring the possibility of turning their loyalty currency into a form of cryptocurrency. This approach not only enhances customer engagement but also provides a new revenue stream for airlines. By enabling loyalty currency to be redeemed more easily by partners, airlines can increase the utility of their currency across the entire customer journey. Airlines have largely mastered the redemption of loyalty currency on their own metal and with airline partners and have also made strides toward making it more easily redeemed with hotel partners. However, enabling loyalty currencies on a blockchain foundation, which sits behind digital wallets, can make it easier for customers to pay for in-destination activities such as tours, tickets, or meals, which have largely eluded airline loyalty programs so far.
Singapore Airlines' Kris+ app has taken a leadership position by allowing customers to use their loyalty points as a digital currency. This blockchain-based loyalty program facilitates partnerships with other businesses, creating a broader ecosystem for customers to redeem their points. By adding the option to use loyalty currency for a wider range of services, airlines can enhance the overall travel experience and increase customer satisfaction.
Surcharging of Corporate Credit Cards
Surcharging corporate credit cards is a practice that has existed for several years, most notably in parts of Europe and Australia. This practice involves adding a fee to the cost of a ticket when a corporate credit card is used for payment. The amounts of surcharges currently in the market vary, but they can be significant. For example, some airlines have at times imposed surcharges of up to 3% of the ticket price.[8] These surcharges are typically applied at the time of booking and are more common in regions where regulatory frameworks allow for such practices.
Recent increases in the prevalence and amounts of surcharges may indicate a return to this trend. In 2024, Air France and KLM added a non-refundable surcharge on corporate credit and debit payments in Canada. The surcharge varies by card network and will not exceed 30 Canadian dollars per ticket issued at Canadian points of sale.[9] British Airways previously implemented a similar move in Canada, adding a surcharge on corporate credit card payments.[10] These changes reflect a broader trend among airlines to manage payment processing costs more effectively.
The reinvigoration of credit card surcharging comes at a time when several emerging payment alternatives are gaining traction and may be supported by more airlines in the future. Blockchain-based payment solutions are being explored for their potential to streamline transactions and reduce costs. These solutions offer greater transparency and security, making them an attractive option for corporate payments. Additionally, financial automation and B2B payments software are becoming more prevalent, with 25% to 35% of corporates with external revenues greater than $300 million having implemented fully digital financial automation according to McKinsey.[11] This trend is expected to increase over the next few years, providing process efficiency and lowering costs for airlines.
However, the scope of surcharging may ultimately be limited by regional regulations and the commercial interests of airlines. Airlines must balance the need to contain payment processing costs with the significant revenue opportunities that co-brand credit card partnerships can provide.
Conclusion
The offer-order transformation is part of a broader trend to make products more personalised, easier to find, and readily transactable. The industry’s payment landscape will evolve together with the gradual replacement of its underlying infrastructure. By staying informed about these trends, airlines can enhance their payment strategies, improve customer experience, and drive revenue growth. Embracing digital wallets, split payments, BNPL, cryptocurrencies, blockchain-based loyalty programs, and surcharging practices can position airlines for success. As the industry continues to evolve, airlines that adapt to these payment trends will be better equipped to meet the needs of modern travellers and drive maximum revenue growth.
[1] https://www.iata.org/en/pressroom/2024-reports/passenger-preferences/
[2] https://www.juniperresearch.com/researchstore/fintech-payments/digital-wallets-research-report
[3] https://www.accenture.com/us-en/insights/financial-services/buy-now-pay-later
[4] https://www.triple-a.io/blog/crypto-ownership-report
[5] https://www.visualcapitalist.com/ranked-the-worlds-top-reserve-currencies-in-2024/
[6] https://www.hardmoneyhistory.com/market-cap-of-gold/
[7] https://www.investopedia.com/where-analysts-think-bitcoin-is-headed-in-2025-update-8762665
[8] https://www.businesstravelnews.com/Payment-Expense/Airlines-Surcharge-Corporate-Cards-in-Europe
[9] https://www.thecompanydime.com/air-france-klm-corporate-card-surcharge/
[10] https://www.thecompanydime.com/british-airways-corporate-card-surcharge/