By Nick Careen
A passenger selects a flight. The schedule works, the fare is right, they add a bag and choose a seat. But the sale is not complete until the payment works.
That final step needs to be quick, secure, and familiar. If it’s slow, confusing, or does not offer the payment option the customer wants to use, the sale is at risk.
That risk is not theoretical. IATA’s 2025 Global Passenger Survey found that 17 percent of travellers who attempted to purchase an ancillary service—an extra bag, seat assignment, or other upgrade—could not complete their purchase. Why? Because the initial payment attempt failed and no other option was available.
The implication is straightforward: payments can directly affect revenue, as well as how much airlines spend, how quickly they receive their money, and their exposure to fraud or failed transactions. In 2024, IATA and Edgar Dunn & Company estimated that airlines processed approximately USD 977 billion in payments, at a cost of USD 22.2 billion.
At this scale, payment choices need to be managed deliberately. And that starts with recognising that there is no single one-size-fits-all solution. From the customer perspective, an individual traveller might prioritise speed and simplicity of payment. On the other hand, a corporate buyer’s needs include policy compliance, approvals, reconciliation, and reporting.
Meanwhile, airlines cannot view payments solely as a cost. Passengers are using an increasingly diverse range of payment methods. While physical cards still dominate, options such as instant payment and digital wallets are growing rapidly. If an airline does not offer a passenger’s preferred payment method, it risks losing the sale.
This growing choice also creates greater complexity. Without effective payment orchestration, matching the right payment method to each customer, sales channel and transaction, settlement costs and delays can increase. To help airlines manage this complexity, IATA supports the industry through the IATA Financial Gateway (IFG) and IATA Pay.
Pleasing all customer segments while maintaining control over cost, fraud risk, settlement timing, refunds, chargebacks, and cash flow is no small challenge. The answer is often different depending on whether you work in commercial, finance, treasury, distribution, digital, risk, or technology functions.
The Airline payment framework
IATA has developed the new Airline Payment Framework – Management Foundation to help management teams look at payment options. Cost remains an important consideration. But the framework broadens the discussion by helping management teams evaluate what payment options enable, and the trade-offs that come with them.
The framework helps airlines look at payments holistically, enabling airlines to make decisions with the same rigor applied to other strategic areas and to track performance over time. Essentially the framework is a common lens through which commercial, finance, treasury, digital, and technology teams can efficiently evaluate payment options together. This avoids fragmented decisions that may serve one purpose but compromise others.
Adopting this disciplined approach does not require major transformation. The payments framework makes ownership clearer, improves visibility of key issues, and facilitates more structured conversations across the business. Elevating payments strategy to this level of rigorous consideration alone will bring benefits across the business.
Publishing the framework now is timely. As the move toward Modern Airline Retailing accelerates, managing payment effectively will become more important. More dynamic offers, richer service offerings, and more personalised customer journeys will require management teams to make decisions on payment options.
In the world of modern airline retailing, payment is no longer a back-office function. It is a strategic capability that influences whether a sale succeeds, how customers experience the airline, and how effectively revenue is converted into cash.
Airlines that recognise the business impact of these decisions will be positioned strongly to compete and grow in the era of Modern Airline Retailing.
- Nick Careen, IATA Senior Vice President, Operations, Safety & Security