Elimination of Travel Business Collateral Requirements

The new solution introduced according to the press release alleviates travel operators’ need for cash collateral when accepting payments from consumers. This system allows consumer payments to be temporarily held by a third party, which can promptly release the full amount to the travel business once agreed-upon conditions are satisfied.

Built with extensive industry experience, this safeguarding model leverages Paysafe’s advanced payment technology and data management skills. It ensures immediate reconciliation of funds upon meeting predefined terms, benefiting both travel companies and their acquirers by providing a robust risk management mechanism.

Addressing Industry Challenges

Traditionally, the industry relies on cash reserves as collateral to mitigate risks associated with consumers’ high-value transactions before service delivery. However, the value of these reserves can fluctuate significantly, posing liquidity challenges and uncertainty for travel businesses.

Recognizing the need to transition away from this traditional collateral-based approach, Paysafe has been piloting its solution with a select number of partners in Europe. The increased urgency brought about by the COVID-19 crisis further underscores the industry’s desire to move towards more streamlined payment relationships that do not rely on cash reserves.