IATA urges airlines to rethink payment strategies

IATA says failed payment attempts are costing airlines revenue, with 17 percent of travellers unable to complete ancillary purchases when no alternative payment option was available. Airlines processed about USD 977 billion in payments in 2024 at a cost of USD 22.2 billion, underlining the commercial importance of payment strategy. IATA’s new Airline Payment Framework is designed to help airlines assess payment options across cost, fraud risk, settlement speed, customer experience and cash flow. The International Air Transport Association (IATA) is urging airlines to adopt a more strategic approach to payments, warning that failed transactions are leading to lost revenue as the industry transitions towards Modern Airline Retailing. In an opinion piece introducing IATA’s new Airline Payment Framework – Management Foundation, Senior Vice President for Operations, Safety & Security Nick Careen said payment should no longer be viewed as a back-office function but as a strategic capability that influences revenue, customer experience and cash flow. According to IATA’s 2025 Global Passenger Survey, 17 percent of travellers who attempted to purchase ancillary services, such as baggage or seat upgrades, were unable to complete their purchase because the initial payment failed and no alternative payment option was available. IATA estimates that airlines processed around USD 977 billion in payments during 2024, at a cost of USD 22.2 billion, highlighting the scale of the financial impact of payment decisions. The association said airlines must consider a wider range of factors beyond transaction costs, including fraud prevention, settlement speed, customer preferences and revenue optimisation, as passengers increasingly use digital wallets, instant payments and other alternative payment methods. To support airlines, IATA has introduced the Airline Payment Framework, designed to help commercial, finance, treasury and technology teams evaluate payment options through a common decision-making framework as airlines continue to modernise their retailing strategies.