In the business of travel, timing is critical. While travellers want to enjoy seamless digital journeys from search to check-in – and onward to a serene holiday experience – many OTAs and DMCs are encountering turbulence behind the scenes. The cause is not customer service, but payment infrastructure that is not fit for purpose.

Suppliers are the foundation of your travel offering. From boutique B&Bs in Tuscany to tour operators in Bangkok, maintaining supplier loyalty is essential. Yet delayed payments, poor remittance data and reconciliation headaches are creating frustration and, increasingly, supplier churn.

According to Modulr research released this year, The Hidden Costs in Travel Payments, one in four OTAs are experiencing lack of access to markets due to payment efficiency. So what can you do about it?

When trust breaks down, bookings follow

Whether you are an independent island B&B or a global bed bank, you have enough to worry about without chasing missing payments.

Suppliers don’t just want to be paid. They want it to happen on time, with clarity and minimal effort, so they can concentrate on the travel customers themselves. When payments are late or untraceable, suppliers are forced to chase funds, increase their own financial buffers, or deprioritise partners that create more friction than value.

In a sector where demand is rebounding and distribution options are expanding, supplier trust is a strategic asset. Without it, you risk missed inventory, lost commissions and failed bookings.

The silent cost of outdated systems

The risks go beyond supplier frustrations, though. In fact, 44% of OTAs waste more than 1.5 hours per person each week due to payment processing inefficiencies.

It is no surprise that more than 70% of OTAs feel that their payment processing could be much more efficient.

Travel businesses manage hundreds of supplier relationships across currencies, geographies and contractual models. But many still rely on invoices, manual bank transfers and patchwork systems that introduce friction into every stage of the payment process.

44% of travel businesses waste over 1.5 hours per person each week due to payment inefficiencies.

That adds up to serious resource drain, especially for businesses operating at scale.

Transfers may arrive late or without the correct reference. IBANs may be entered incorrectly. Currency mismatches and international delays can create confusion, leading to back-office burden and supplier dissatisfaction.

Alarmingly, only 17% of OTAs studied by Modulr automate their supplier payments, meaning that more than four out of five are leaving efficiencies on the table and accepting unnecessary risk, manual work and supplier upset.

Virtual cards: a smarter route to supplier satisfaction

Virtual cards provide a modern alternative to traditional B2B payments and have been wholeheartedly embraced by OTAs – according to the payments technology firm Juniper, by 2028, travel’s transaction revenue on virtual cards could top a staggering $113.8 billion.

That growth is thanks to their enormous scalability, speed of issuance, security, adaptability and widespread acceptance. New cards can be generated and synchronised with funding accounts in moments. When issued on-demand for specific transactions they deliver instant funding, built-in reconciliation and greater control over how and when funds move.

There are also a number of specific ways Modulr issues virtual cards improve the supplier payment experience:

• Real-time funding: Cards can be issued and funded instantly and automatically from a dedicated e-money account at the point of need, meaning that supplier payments are far less likely to fail due to lack of funds. Authorisation is near real-time too, in contrast to typical invoice-based payments.
  
  
• Automated reconciliation: Each card can be tied to a specific booking, partner or transaction ID and be supported with detailed metadata in custom fields, allowing automated matching of transactions to customer bookings. This eliminates manual matching and reduces error rates within accounting functions.
  
  
• Consistent remittance data: Suppliers receive the detail they need, every time, without relying on manual entry or inconsistent formats, reducing errors from mismatched details.
  
  
• Fraud prevention: Beyond the fundamental tokenisation within a card payment, which replaces and conceals sensitive payment information, single-use cards with built-in spend constraints ensure funds can only be spent by the intended recipient, within specific contexts and specific times, speeding up due diligence and increasing trust.
  
  
• Global reach: Visa and Mastercard are truly global schemes, with cards accepted in almost every location. While not every supplier will accept card payments (as detailed below), access to a range of cards gives the greatest chance of finding a method that suits both parties.
  
  
• Multi-currency support: Local and multi-currency card issuing is increasingly being used by OTAs keen to reduce FX costs at the local level, while streamlining acceptance for suppliers wishing to pay in local currency. Such tailoring can significantly improve acceptance rates for virtual cards and make it less likely OTAs are left carrying currency exposure.

Rethinking the fee objection

It’s true that card acceptance fees can present a hurdle for some suppliers. Interchange rates can be prohibitive on low-value or extremely high value transactions, rigid FX rates can be costly, and settlement delays can still occur. But resistance is changing. Acceptance rates are improving, and fee structures can be optimised depending on card type and geography.

Through card issuers like Modulr, OTAs can generate cards with specific Bank Identification Number or BIN ranges and connect them to accounts with a range of local International Bank Account Numbers (IBANs), which create different profiles of card and enables intelligent routing of transactions to optimise acceptance and minimise cross-border fees.

This allows better control over interchange rates and currency exposure. In practice, this means paying suppliers in their preferred currency, reducing FX costs and boosting card acceptance without compromising reconciliation or reporting.

96% say their payment system could be more efficient.

This flexibility empowers travel businesses to negotiate mutually better terms with suppliers, while still benefiting from instant funding, automated reconciliation, and enhanced security.

Chargebacks are another area of supplier concern, with so called ‘friendly fraud’ occurring where guests dispute charges and thereby avoid paying. However, many of these chargebacks are due to guests finding it easier to challenge a bill through their card provider or bank rather than their hotel, for instance.

This is one area where card payments are evolving, with booking metadata and authentication tools such as two-factor authentication helping draw a direct line between a payment and the experience or service booked, making it much harder to challenge.

Where OTAs operate an automated, efficient system their suppliers can stop chasing payments, reduce their own processing burden and benefit from faster, more reliable cash flow. For many, the switch to virtual cards is a net positive, even once rates are accounted for.

Payments as a lever for growth

Whether via invoice, card, digital wallet or even BNPL, payments aren’t just back-office operations. They are moments of interaction that define the quality of your relationships. When those payments arrive accurately and on time, they signal professionalism and reliability. When they don’t, they erode goodwill and create avoidable friction.

Adopting virtual cards enables OTAs and DMCs to:

• Eliminate payment delays and confusion
• Automate reconciliation and reporting
• Reduce fraud and manual error
• Provide a consistent, professional supplier experience

In a competitive, margin-sensitive market, the ability to pay well is a true differentiator.

Because in travel, it’s not just the destination that matters. It's how you get there.

Learn how Modulr enables travel businesses to eliminate friction in supplier payments—with real-time virtual cards, automated reconciliation, and multi-currency control.