Photo: Shutterstock The International Air Transport Association (IATA) is calling on airlines to rethink how they manage payments, arguing that payment systems have become a strategic driver of revenue, customer experience, and operational efficiency rather than simply a back-office function.
In a new commentary, Nick Careen, IATA Senior Vice President for Operations, Safety & Security, highlighted that the payment process is often the final step in securing a booking, and one of the easiest places for airlines to lose sales.
According to IATA's 2025 Global Passenger Survey, 17% of travelers who attempted to purchase ancillary services, such as checked baggage, seat selection, or upgrades, were unable to complete their transaction because their initial payment failed and no alternative payment option was available.
The financial impact is substantial. IATA and consulting firm Edgar, Dunn & Company estimate that airlines processed approximately $977 billion in payments during 2024, incurring payment-related costs of around $22.2 billion.
Careen noted that while physical payment cards remain the dominant payment method, digital wallets and instant payment solutions are becoming increasingly popular. Airlines that fail to offer customers their preferred payment methods risk losing bookings, while managing multiple payment options also adds complexity to settlement, fraud prevention, refunds, and cash flow.
To help airlines address these challenges, IATA has introduced the Airline Payment Framework – Management Foundation, a new framework designed to help management teams evaluate payment strategies across commercial, finance, treasury, digital, technology, and risk functions.
Rather than focusing solely on payment costs, the framework encourages airlines to assess broader factors such as customer experience, fraud exposure, settlement timing, chargebacks, and operational efficiency. IATA says the framework promotes better cross-functional decision-making and helps airlines manage payments with the same strategic discipline applied to other areas of the business.
The association believes the initiative comes at a critical time as the industry moves toward Modern Airline Retailing, where personalized offers, dynamic pricing, and expanded ancillary services make seamless payment experiences increasingly important.
According to Careen, airlines that elevate payment strategy beyond a traditional finance function will be better positioned to improve conversion rates, strengthen customer satisfaction, and compete in an increasingly digital marketplace.