Global airlines face rising payment costs as IATA urges shift to cheaper methods

Airlines worldwide spent \$24.5 billion processing \$1.05 trillion in ticket sales in 2025, according to the International Air Transport Association (IATA). This means payment costs are rising faster than travel sales, putting extra pressure on airline margins and potentially affecting fares and payment options for African travellers and sellers.

IATA reports that payment processing costs grew by 10.4 per cent from 2023 to 2025, outpacing the 7.7 per cent growth in travel sales over the same period. The average payment cost per passenger reached \$5, which is higher than the industry’s forecast net profit of \$4.50 per passenger for 2026. IATA’s Interim Director General and CFO, Sandrine Le Borgne, called the trend “unsustainable” for an industry with tight profit margins, stating: “The fact that payment transaction costs are increasing faster than industry revenues is unsustainable and, despite significant technological advances, highlights the critical need for greater cost efficiency.”

An analysis of the \$24.5 billion spent in 2025 shows that \$20.7 billion (84.5 per cent) went to direct payment fees, \$2.9 billion (11.8 per cent) to operating costs such as payment system management, delayed cash flow, staffing and compliance, and \$900 million (3.7 per cent) was lost to fraud or uncollected sales. Card payments remain the most expensive, with average fees of 2.53 per cent, compared to an overall average of 1.97 per cent. The lowest-cost payment options attract fees as low as 0.01 per cent.

For African travel sellers, these rising costs may influence which payment methods are accepted and promoted. IATA’s 2025 Global Passenger Survey found that 29 per cent of passengers prefer digital wallets, while 8 per cent favour local instant payment solutions. However, IATA research also shows that about one in five attempts to buy ancillary services (such as baggage or seat selection) fails because the initial payment is declined and no alternative method is offered. Le Borgne said that expanding payment options could help airlines recover lost revenue and improve the customer experience.

To address these challenges, IATA is encouraging airlines to adopt alternative payment methods and improve transparency. IATA Pay, which enables purchases through local instant payment systems, is now available in 34 countries and supports 38 payment schemes. The IATA Financial Gateway platform allows airlines and travel suppliers to manage payments across more than 170 countries and over 300 payment methods. Other initiatives include the Transparency in Payments solution for agency card payments, IATA EASY PAY, and a new Airline Payment Framework to help carriers align their commercial and financial strategies when choosing payment options.

For the African travel trade, these developments may bring more payment choices for clients, lower transaction costs, and new opportunities to capture revenue that would otherwise be lost to failed payments or high fees. Agencies should monitor which payment solutions their airline partners support and consider how evolving payment technology could affect their own operations and customer service.

Sources: IATA, press release, 27 October 2026;