by WEX Travel
For the travel company of today catering to the needs and tastes of customers is vital to business success.
In order to give customers what they want it is important that travel companies have the right mix of booking options, which means working with the right supplier base. Building strong relationships with suppliers is therefore central to the success of a travel company.
How do you build and maintain strong relationships with suppliers?
The payment method you choose to pay suppliers can be essential. If you understand the challenges that your suppliers face in accepting payments and mitigate these with the right payment method, relationships will be strengthened.
What Challenges do Suppliers Face in Accepting payments?
In recent research into Europe’s travel payments landscape, which was co-sponsored by WEX and undertaken by Phocuswright, a number of challenges for suppliers in accepting payments were highlighted:
- Length of time taken to receive payment
- Risk of travel agency default
- Processing of manual payments
- Currency conversion
For more insight and to learn how virtual payments help solve these challenges for suppliers, as well as benefiting travel companies, download our whitepaper:
In this blog post we’ll focus currency conversion and the challenges that accepting payments from overseas in foreign currencies pose for travel suppliers.
Infographic: Challenges of Cross-Border and Foreign Currency Payments for Suppliers
The Phocuswright study shows that 86% of travel companies are paying suppliers in between 1 and 5 currencies:
- 36% pay in 1 currency only
- 29% pay in 2 currencies
- 21% pay in 3 to 5 currencies
14% of travel companies pay suppliers in 6 or more currencies.
By comparison, more supplier accept payment in just 1 currency (59%) but 31% of suppliers accept payment in 6 or more currencies.
Where suppliers accept just 1 currency travel companies need a payment method that allows this. However, where suppliers accept 6 or more currencies while it allows travel companies to pay in their chosen currency it can pose challenges for the supplier in terms of acceptance costs and time consuming management processes.
The key challenges for suppliers when accepting cross-border and foreign currency payments are:
- Cost – accepting payment in a currency other than their won can incur a fee which can soon add up over time
- Administration headaches – maintaining bank accounts in different currencies or working with suppliers to provide local pricing is time consuming and creates reconciliation challenges
- Limited pool of buyers – accepting only one currency is simple for suppliers but can impact their ability to work with travel companies not able or willing to pay in that currency