Thredd, a payments company, has partnered with Mastercard to enhance payment efficiency for travel agencies by utilizing Mastercard’s network infrastructure.

The challenges faced by online travel agencies (OTAs) such as Expedia or Airbnb are significant due to their business model. These companies often make upfront reservations based on partial payments, which carry a high risk of changes or cancellations.

These risks are even more pronounced in international transactions where cross-border payments pose additional challenges like higher fees, longer settlement times, and regulatory hurdles.

To address these issues, Thredd offers personalized virtual card payments that can be customized according to geographical regions, payment types, or transaction volumes. Through the Mastercard Wholesale Program (MWP), travel companies can streamline their payment processes and foster trust among global partners by using product codes tailored for B2B travel payments.

Challenging Trust

The need to establish trust in the travel industry is substantial, considering the large number of suppliers involved. Every hotel, airline, or cruise line can be a potential partner.

OTAs also must gain consumer trust, particularly regarding payment security. According to Outpace data, over 70% of travelers prefer using companies known for secure payment methods.

Struggling to Support

The increasing focus on security is driven not only by cross-border complexities and the rise in fraud but also by a proliferation of new payment types. Besides local currencies, real-time payments systems, stablecoins, CBDCs, and other digital payment methods are now common.

This fragmentation has led to a diverse cross-border payment landscape, where consumers might need multiple payment channels for international transactions. Similarly, travel agencies struggle with supporting the broad range of available payment options, which can affect their profitability due to inefficient payment systems.