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New B2B payment innovation offers airlines $2 billion a year opportunity

New B2B ‘closed-loop’ payment solution could significantly reduce the $20.3 billion airlines spent on payments in 2019, shows report from Nium. 14-page report ‘Closing the loop for air travel: a new payments model for airlines and online travel agencies.’ is free to download. Report follows launch of Nium Airline Payment (NAP), a B2B closed-loop solution signed-up for by Air Europa that avoids damaging surcharges and restricting non-acceptance policies.

LONDON – Nium, the global platform for Modern Money Movement, has published a report revealing how new ‘closed-loop’ B2B payment solutions to share payment costs between airlines and travel sellers more equitably could provide a much-needed economic boost for the industry.

The free-to-download 14-page report – titled Closing the loop for air travel: A new payments model for airlines and online travel agencies – reveals that in 2019 airlines spent $20.3 billion in payment costs, equivalent to approximately 78% of the industry’s net profit.

A significant part of that sum comes about as a result of costly, old-fashioned and very slow ‘double-loop’ payment ecosystems fraught with surcharges, acceptance issues, fines, and declined payments.

However, by embracing new ‘closed-loop’ payments technology – a sustainable and equitable payment model that closes the door on damaging surcharges and business restricting non-acceptance policies – airlines could potentially save as much as $2 billion dollars annually.

“One of the biggest airline distribution conundrums of the internet era has long-since been: do I increase my distribution at the price of accepting high payment fees, or limit distribution to those with low payment costs but reduce overall sales opportunities? This problem goes away with the development of closed loop payment solutions, allowing airlines and travel sellers to collaborate in a sustainable and more equitable fashion – and save airlines up to $2 billion a year at a time when returning to profitability is more important than ever before” stated Spencer Hanlon, Head of Travel at Nium.

Closing the loop for air travel: A new payments model for airlines and online travel agencies is available for free download here. 

The report follows the recent launch of Nium Airline Payments (NAP), a closed-loop payments solution powered by Universal Air Travel Plan (UATP).

Among the first to contract with Nium for the solution include Air Europa, which has tapped the global payments company to solve some of the inequities associated with traditional card payment models.

Co-Founder & Chief Editor - TravelDailyNews Media Network | Website | + Posts

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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