IATA Urges Airlines to Review Their Payment Strategies

The International Air Transport Association (IATA) is urging airlines to re-evaluate their payment strategies, highlighting that convenient and dependable payment options are increasingly vital for driving sales and ensuring passenger satisfaction.

Nick Careen, IATA's senior vice president for operations, safety, and security, stated that the purchase of an airline ticket is only finalized upon a successful payment. He warned that if this step is challenging, slow, or doesn't offer a customer's preferred payment method, the airline risks losing the sale.

Data from IATA's Global Passenger Survey 2025 revealed that 17% of passengers attempting to buy ancillary services, such as baggage fees or seat selection, were unable to complete their purchase. The main reasons cited were an initial payment failure and the absence of alternative payment options.

IATA stressed that an efficient payment system impacts not only an airline's revenue but also the speed at which funds are received, operational expenses, and exposure to fraud and failed transactions.

A collaborative study by IATA and the consulting firm Edgar, Dunn & Company indicated that airlines processed approximately US$977 billion in payments during 2024, with the total cost of processing these transactions reaching US$22.2 billion.

IATA pointed out that no single payment method suits everyone. While individual passengers prioritize speed and simplicity, corporate clients require tools for expense approval, reporting, and adherence to internal protocols.

The association also noted the rapid evolution of payment tools. Although bank cards remain prevalent, instant payments and digital wallets are gaining traction. If an airline fails to provide a customer's preferred payment method, the probability of the customer abandoning the purchase rises considerably.

To enhance payment processing efficiency, IATA is advancing its IATA Financial Gateway (IFG) and IATA Pay services.

Furthermore, IATA has introduced a new framework, the Airline Payment Framework – Management Foundation. This methodology suggests evaluating payment solutions not solely on their cost but also on their influence on customer experience, settlement speed, risk management, refunds, chargebacks, and cash flow.

IATA believes this new methodology is especially pertinent given the growth of the Modern Airline Retailing concept, which encompasses personalized offers, a broader array of ancillary services, and dynamic pricing.

According to the association, payment infrastructure has emerged as a critical component of commercial efficiency for airlines in today's environment.