A practical guide for OTAs and travel sellers, exploring how modern payments infrastructure transforms operations, supplier relationships and scale. This report is designed to inform and inspire travel businesses seeking a smarter approach to payments.
- Are your virtual cards working hard enough?
- When payments block growth
- Fixing virtual card declines
- Paying suppliers on their terms
- Common mistakes from virtual card providers
- Modulr’s virtual cards, explained
- One platform for all payments
- Let’s talk about what’s possible
1: Are your virtual cards working hard enough?
Virtual cards are familiar in travel — but their full potential is not
Most OTAs use virtual cards. Few get the full benefit. If you’re juggling outdated systems, real-time visibility issues or manual processes, you’re not getting the return you should.
Virtual cards are essential for paying suppliers securely, managing risk and scaling globally. But familiarity doesn’t always mean optimisation. Many travel businesses still rely on outdated setups that don’t talk to core systems, fail to reconcile in real time, and require frustrating manual processes just to keep the wheels turning.
“96% of travel businesses believe their payment processes could be significantly more efficient.” The Hidden Costs in Travel Payments, Modulr, 2025
What’s slowing you down?
Even when payments ‘work’ for OTAs operating as merchants of record, that doesn’t mean they’re efficient. If your provider depends on a third-party bank to issue cards, there’s a good chance your funding process is too rigid — or worse, out of sync. That results in pre-funding accounts that don’t reflect your cash position, failed authorisations, and reconciliation that’s more guesswork than system-led.
Even when funding isn’t a problem, there are a number of wider inefficiencies common to virtual card payments in travel that can be avoided:
- Suppliers can simply refuse acceptance, whether hotels at check-in or airlines at point-of-sale. Without alternative cards, or a backup payment method, many payments fail on the spot.
- Poorly considered limits on a virtual card can leave incidentals outside the initial payment scope, forcing confused customers to check-in or settle bills on additional cards and introducing the potential for reconciliation headaches for both OTA and supplier.
- Rigid merchant category code (MCC) acceptance at the point of sale can cause payment failure for any issuers unable to generate cards in appropriate codes responsively, or better, pre-emptively.
- Reconciliation can falter as invoices are either missed or not issued, due to a disconnect between booking and property management systems or lack of training for frontline staff.
Virtual cards done right
When built into a modern, API-first infrastructure, virtual cards become something else entirely:
- Instantly issued per booking or per supplier
- Funded in real time, without tying up capital
- Tracked and reconciled automatically
- Managed via rules and profiles that match how travel actually works
- Backed by live notifications for every key payment event
- Flexible and robust, with a choice of BIN sponsorship, MCC and currency
You move faster. You reduce manual checks. You make life easier for both your finance team and your supplier network.
Let us show you what’s possible through payments.
2: When payments block growth
OTAs are built to scale — fragmented payments slows that down
Travel businesses are built to fly high — but fragmented payment processes can hold everything back. From failed supplier payouts to reconciliation chaos, the wrong setup risks losing bookings, margins and supplier trust.
Maybe it’s that funding accounts are out of sync, payment methods are siloed, or reconciliation remains grindingly manual — when your payments infrastructure doesn’t keep up it keeps every part of your business grounded.
In travel, that can cost you.
"More than 99% of OTAs are concerned about the friction within payment processes in travel." The Hidden Costs in Travel Payments, Modulr, 2025
When payments are a bottleneck, not a backbone
It’s easy to underestimate the impact of an inefficient setup. But every additional touchpoint — every third-party card issuer, FX intermediary or batch upload — adds friction. That friction causes delays, errors, blind spots, and overheads.
That can mean:
- Delayed payouts to suppliers
- Failed or duplicate payments
- Cash flow blind spots across regions
- Hours lost reconciling after the fact
- A missed booking because a supplier couldn’t be paid in time
A strategic payments structure changes everything
When it comes to virtual card suppliers, some work differently and most are not created with the travel industry in mind. Simply pursuing aggressive interchange rates is not a winning strategy when you also take on greater risks of payment failure, or are unable to manage typical use cases for a busy travel business.
And while many OTAs may be accepting of – or even numb to – the painful status quo of manual and time-consuming card creation, the fact is, there is another way.
Forward-thinking OTAs are now treating payments as a core part of their growth strategy, with virtual card infrastructure that enables:
- Automated payouts and collections
- Instant reconciliation with full visibility
- Multi-currency support in one place
- No reliance on external banking relationships
Modulr allows OTAs to manage the full payment lifecycle from one platform, giving them the speed, visibility and resilience they need to scale.
3: Fixing virtual card declines
Virtual cards should reflect the realities of travel
In travel, one failed card payment can derail a booking. It’s one of the most frustrating things an OTA can face. You’ve secured the booking, the customer’s paid, but the virtual card gets declined — and the supplier can’t fulfil the reservation.
Your ops team scrambles. The clock ticks. The traveller’s confidence starts to erode. All because of an invisible fault line in your payments infrastructure.
"One in four OTAs say payment-related friction affects their ability to close bookings." The Hidden Costs in Travel Payments, Modulr, 2025
This isn’t about supplier error. It’s about your setup.
Low acceptance rates often come down to backend issues — not the suppliers themselves.
Card acceptance issues aren’t random. They tend to cluster around predictable failure points often tied to poor integration, manual processes, or third-party banking layers. These include:
- Card issuers being unable to confirm funds in real time
- Ledger balances lagging behind actual funds held
- Pre-funded accounts that don’t reflect the true availability to a card
- Rigid authorisation windows that don’t align with check-in or booking flows
- Limited access to the right card types or MCC profiles
Any one issue can cause a card to fail — even when the money is there. What’s more, they tend to emerge at the worst possible time: when availability is tight, the traveller is on-site, or your operations team is trying to process a time-sensitive booking.
The key to fixing virtual card acceptance isn’t asking your suppliers to change. It’s upgrading your ability to manage the payment upstream.
With the right infrastructure:
- Cards can be issued and funded in real time
- Authorisation rules can be set to match specific use cases or supplier preferences
- Card-level data can be monitored live
- MCCs and card types can be matched to what your supplier network will accept
- Failed transactions can trigger instant alerts so that immediate remedial decisions can be made, whether alternative cards or alternative payment methods entirely
Informed choices around virtual cards
Your infrastructure gives you control — over timing, limits, logic, and data.
- Account-based funding
A key strategy to combat failures through a perceived lack of funds is to work with virtual card suppliers able to authorise the card against the funds held in your account, rather than the funds that are on the card itself. - Instant payments
What’s more, ensuring that you’re able to fund that account instantly, 24/7, 365, adds real piece of mind. Look for both SEPA Instant and Faster Payments capabilities, so that should extra funds be needed, they can be delivered and recognised at once. - Single platform
You will have far greater control over funding when the virtual card provider you’re working with operates your funding account itself, and isn’t reliant on third-party banking providers. This helps avoid issues with ledgers synching, delays and more payment failures as a result. - Multiple schemes
Clearly, being able to issue Visa and Mastercard is also important, as not all suppliers can accept both of the main global schemes. - Card variety
Access to a wide range of BIN sponsorships and MCCs can help avoid cards being flagged and blocked or surcharged. - Rate flexibility
Similarly, the ability to access a wide range of interchange rates is incredibly valuable, especially if you work with a wide range of suppliers in different markets.
Reliability builds reputation
The most competitive OTAs aren’t just efficient — they’re predictable. In a high-volume OTA environment, you need every payment to work the first time. Failed authorisations don’t just frustrate ops — they can cost you inventory, erode trust with suppliers, and diminish your traveller experience.
4: Paying suppliers on their terms
A flexible payments setup helps you adapt to any supplier, in any corner of the travel ecosystem.
In other industries, payment preferences tend to converge around a few standard methods. Not so in travel. Here, fragmentation is the norm. Local accommodation providers may only accept bank transfers. Airlines may surcharge OTA cards. Some Destination Management Companies (DMCs) insist on domestic accounts to avoid delays. Others reject any payment routed through a commercial intermediary.
The more markets you serve, the more complex this gets. And if you can’t adapt — fast — your access to inventory suffers. That’s why payment flexibility is now a strategic differentiator.
From boutique riads in Marrakech to low-cost carriers in Eastern Europe, no two suppliers are alike — and neither are their payment preferences.
Some are happy with virtual cards. Others demand local bank transfers, or insist on SEPA or SWIFT. And a growing number are tightening controls, rejecting intermediary payments, or applying surcharges that erode already-thin margins.
As an OTA, your business depends on access to inventory. That means working with a wide, often unpredictable network of partners — many of whom have strong views on how they want to be paid.
And while virtual cards solve a lot of problems, they don’t cover every scenario. If you’re stuck trying to pay a supplier that blocks card usage, or navigating a reconciliation nightmare across multiple banking platforms, the ripple effects are real:
- Slower time to booking
- Manual interventions from finance and ops
- Risk of missing out on rate or availability
- Strained relationships when payment methods don’t align
- Increased cost when a workaround means forfeiting negotiated rates
- Erosion of supplier trust
Even worse, in some cases OTAs are forced to make bookings using repeat-use cards or other ad hoc methods — undermining internal controls and increasing operational risk.
The case for consolidation
Forward-looking travel sellers are consolidating their payments through a single platform — one that supports the full spectrum of supplier preferences:
- Virtual cards
- SEPA and SWIFT bank transfers
- Account-to-account payments in GBP and EUR
- Direct Debit (for subscription models or recurring B2B payments)
- Local IBANs and multi-currency settlement
With Modulr, every payment method is integrated, reconciled and reported through the same infrastructure — giving you complete control and real-time visibility across your supplier network.
No more managing fragmented bank relationships. No more copy-pasting account details into spreadsheets. Just seamless payments, whatever the preference.
Whether it’s a five-star hotel in Florence or a ferry operator in the Cyclades, each supplier relationship is built on trust — and nothing erodes trust like a delayed or failed payment.
5: Common mistakes from virtual card providers
Are virtual cards part of your big payments picture?
At a glance, virtual cards seem like a solved problem in travel. Most OTAs have them. Most suppliers accept them. Most processes are already in place.
But dig a little deeper and the cracks appear — in the form of failed payments, slow funding, spiralling FX charges and operational workarounds that take hours out of your team’s day.
These issues rarely show up during onboarding or in a product demo. They only emerge when you’re running at volume — juggling suppliers, currencies and tight timelines.
Here are the five most common pain points we see and what to look for when choosing the right provider:
- Hidden FX mark-ups that chip away at profit
Many virtual card programmes automatically convert currencies using the scheme’s FX rate — often far less competitive than rates you could negotiate directly. This can erode your already-thin margins, especially when booking high volumes with overseas suppliers.
You can try to find the best FX rate for every payment, but wouldn’t it be better to simply raise cards in the supplier’s currency? With 11 currencies already available, Modulr cards offer this flexibility.
- Overfunding and sync issues caused by third-party banks
If your provider relies on a sponsor bank, you might be forced to pre-fund separate accounts, which ties up capital, causes ledger mismatches, and slows down funding. These balances often don’t update in real time — leading to failed transactions even when funds are technically available.
- Lack of control over the funds you’ve paid in
When funding accounts are held by the issuer rather than on your own balance sheet, liquidity becomes harder to manage. Reconciliation and reporting suffer, and you lose financial agility — especially when you need to move quickly.
- Supplier resistance — especially from low-cost carriers
Many low-cost airlines and regional operators actively restrict payments from OTA-issued cards. If you don’t have alternative cards or payment methods as automatic substitutes, this can lead to failed bookings or manual workarounds that introduce risk.
- Inconsistent acceptance across markets and partners
Even well-known suppliers behave differently across regions. If your provider only supports fixed card types or a limited set of MCCs, flexibility is compromised — and you’re left reacting instead of optimising.
A virtual card setup should work for your business — not the other way around. The difference between a passable solution and a great one isn’t just feature depth. It’s the clarity, confidence and control it provides when operating at scale.
With Modulr, cards are issued natively, balances are managed directly and authorisations reflect real-time cash availability. No middlemen. No unnecessary float. No lag.
“With Modulr we get a range of benefits that other financial technology companies simply cannot provide, all in one place.”
Dave Robinson, COO and Deputy CEO, Pax2Pay
6: Modulr’s virtual cards, explained
Real-time funding. Full control. Designed for how OTAs really operate.
You already use virtual cards. But if you're juggling pre-funded accounts, battling failed authorisations, or waiting days for new funds to land, your current setup is costing you more than it should.
Modulr’s virtual cards are different. They’re designed for how OTAs actually work:
- Single or multi-use
- API built for instant issuance
- Funded at the point of authorisation
- Built-in spend controls and MCC profiles
- Realtime authorisation and refund alerts
- No third-party banks or sync issues
It’s all part of a unified infrastructure that reduces risk, boosts efficiency, and integrates with key travel platforms like Voxel, Juniper, Roibos and Conferma.
7: One platform for all payments
Virtual cards. A2A. SEPA. SWIFT. All under one roof — fully reconciled, fully flexible.
Consolidating payment methods into a single infrastructure transforms operations. Modulr supports:
- 12+ methods: Cards, A2A, SWIFT, SEPA, DD, PIS
- Instant access to local and multi-currency accounts
- Real-time GBP and EUR payments
- Full API and reporting access
You get faster reconciliation, better cash flow control, and fewer operational headaches — all without replacing your existing systems.
8: Let’s talk about what’s possible
Over £1bn settled monthly for OTAs. Here’s what Modulr could unlock for you.
Modulr processes over £150bn annually, powering £1bn per month in travel payments alone. We support 180+ OTAs directly or through partners.
- Directly regulated by the FCA and DNB
- Principal member of Mastercard and Visa
- Instant access to GBP and EUR clearing
- Cards and accounts on one natively built platform
Ready to learn more?
