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Travel Payments Insights

Tips on entering emerging travel payment markets

April 23, 2024

For online travel agencies (OTAs), growing into new and emerging countries can be tempered by unexpected obstacles that affect operations and profitability. You may be struggling to understand the key terms, regulations, and difficulties that can plague your business in new markets. Let’s delve into some crucial factors you should consider when venturing into new and diverse countries, offering insights and practical solutions to ensure a smoother entry into uncharted territories.

Local currencies

Different rates, currencies, and conversions can make it even more challenging for new and existing processors to do business in multiple countries. These intricacies can significantly impact operational efficiency and financial stability, and the diversity in currencies, rates, and conversion processes can be overwhelming. 

It is important to understand that most exchange rates are not fixed, meaning their values constantly change depending on economic factors including inflation, as well as supply and demand. Therefore, it may be ideal to hire local experts to take on these complexities or outsource to a third party.

Card schemes

Understanding card schemes wherever you are doing business is always a key factor in efficient payment processes. Globally, Mastercard and Visa are the two largest card schemes. . However, in some countries, you may need to understand the card schemes that are unique to that country. It is always a good idea to ask yourself, “What is the easiest way for your customer to pay and for you to reconcile that payment?” 

Local regulations

When entering new and emerging countries, there are new and unique regulations presented. This can create headaches for your finance teams. Be aware of the following: 

  • Taxes: Some of the most exciting global markets for expansion, such as Brazil, India, and Mexico, come bundled with intricate tax structures. European counterparts present no exemption from this complexity.
  • Regional restrictions: The laws and regulations impacting payments introduce rapid changes. This poses obstacles for payment processors and providers unfamiliar with the intricacies of processing payments in specific regions.
  • Statutory and regulatory concerns: Aligning data privacy and security practices with country-specific regulations is crucial. Non-compliance penalties are severe, with additional requirements like PCI DSS adding to the regulatory complications.

Supplier dynamics

The ever-present threat of fraud, and the growing dominance of e-commerce, makes it crucial to strike the right balance between these elements for OTAs expanding into diverse markets. With nearly 20% of all attempted transactions in the travel industry identified as a fraud attack, according to ThreatMetrix, fraud is a real risk that needs to be accounted for when entering emerging markets. 

Another key component to think about when you have international customers is billing and payments related questions from customers in different languages and time zones. The more geographies you move into, the more complex and time-consuming answering these questions can get. Staying informed about the evolving trends and consumer preferences in each region will position you to make informed decisions and navigate the complex payment landscape effectively.

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The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers. 

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