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A new report from Airwallex and travel research firm Skrift Research shows that up to 84 percent of travel executives in Singapore noted a significant decrease in profits due to their current payment systems.
According to the 2024 State of Payments in the Travel Industry Report, up to 89 percent of Singaporean travel executives noted a change in their clients’ payment preferences since the pandemic first hit in 2020.
Rather than pay over the counter in person or use cash, many Singaporeans prefer to pay for their trips online via credit or debit cards, digital wallets, as well as local digital payment methods like PayNow or GrabPay.
Payment systems continue to pose issues
However, most travel agencies continue to pay their suppliers via bank or wire transfers, regardless of whether these are in-country or overseas. This leads to numerous issues, including lengthy processing times, fluctuating exchange rates, and challenges in tracking and reconciling payments.
To address this, around 95 percent of travel executives in the country said that there is a need to upgrade both payment systems and financial operation technologies. Many of the firms surveyed for the report are set to address the issue over the next twelve months.
Many travel agencies expressed an interest in adopting an all-in-one payments and financial operations platform to manage numerous financial transactions all at once, including the management of internal funds, collection of payment from customers, and payment to suppliers.
Greater financial challenges post-pandemic
Inefficient and outdated payment systems also caused serious legal issues over the past couple of years. Fraudulent payment activity, in particular, continues to rise, while the rise of new online payment systems have made cross-border payments more complicated.
Singaporean travel executives’ difficulties with cross-border payments have also made it difficult for them to expand into key overseas markets such as Australia, Japan, and New Zealand. This matter needs to be addressed as soon as possible as 45 percent of travel agencies’ revenues come from international transactions.
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