Klasha powers payment for the global travel industry

The travel industry, often synonymous with tourism, ranks as one of the world's largest service sectors.

It revolves around facilitating the movement of people from one destination to another. Whether the purpose is business, leisure, or exploration, travel has become an indispensable facet of society.

The industry is a complex and multifaceted sector that promotes economic growth, cultural exchange, and global connectivity. While the experience of travelling has become increasingly accessible and convenient, behind the scenes, there's a complex web of financial transactions that make it all possible.

In this article, we will explore how Klasha, a leading cross-payment solution provider, empowers payments for the travel industry.

The rapid growth of the travel industry

According to World Travel and Tourism Council research, the travel and tourism industry played a significant role in the global economy before the pandemic. It created 1 in 4 new jobs worldwide, accounting for 10.3% of all jobs (333 million) and contributing 10.3% to the global GDP (USD 9.6 trillion).

However, due to the impact of COVID-19, the sector experienced staggering losses, amounting to almost USD 4.9 trillion. Its contribution to the global GDP declined by 50.4% year-on-year, in stark contrast to the overall global economy, which saw a 3.3% decline.

In the post-COVID era, there was a notable recovery in the travel and tourism sector. In 2021, its contribution to GDP increased by USD 1 trillion, marking a substantial 21.7% rise, bringing it to USD 5.8 trillion. Additionally, the sector's share of the overall economy increased from 5.3% in 2020 to 6.1% in 2021. The sector also recovered 18.2 million jobs, representing a significant increase of 6.7%.

The travel industry has experienced remarkable growth, driven by globalization, advancements in transportation infrastructure, and the widespread adoption of digital technology. These developments have paved the way for significant expansion within the sector.

The future outlook is positive; travel & tourism GDP is set to grow on average by 5.8% annually between 2022 and 2032, outpacing the overall economy's growth (2.7% per year). Revenue in the travel & tourism market is projected to reach US$2,953.00m in 2023.

The advent of online travel agencies, booking platforms, and mobile apps has made it easier than ever for travelers to plan and book their trips. With this travel surge, the industry's payment landscape has evolved significantly.

Gone are the days when travelers carried wads of cash or traveler's checks. Digital payments, debit cards, and mobile wallets dominate the scene today. However, this transformation hasn't come without its fair share of payment challenges.

The travel industry and payment challenges

With exponential growth comes challenges. In this case, the travel industry is plagued with payment challenges. From cross-border transactions to currency conversions and fraud prevention, travel businesses constantly grapple with the complexities of payment processing. Some of these challenges include;

Cross-border transactions and currency conversion: Travelers often face significant challenges regarding cross-border transactions. Currency conversion, international transaction fees, and varying regulations complicate payments for travelers and travel businesses.
Travelers, especially African travelers, must convert their currencies to pay for international flights and services. To ease the stress, travelers and travel businesses often use complex currency exchange rates involving different vendors to meet their needs.
Payment reconciliation: For travel agencies and hotels, reconciling payments from various sources can be a logistical nightmare. This process usually involves multiple payment gateways, currencies, and transaction types.
Payment security: With the growing threat of data breaches and cyberattacks, payment security is paramount. With different payment gateways and currency vendors, travel businesses have to battle with providing checks and balances to various vendors.
Fraud prevention: The travel industry has become a prime target for fraudsters due to the high volume of transactions. Detecting and preventing fraudulent transactions while maintaining a smooth booking experience is a delicate balance.
Payout complexities: Vendors who often sell their services to be ultimately provided by other firms that require payment suffer setbacks in managing refunds when required. The management and execution of these payments can be very complex, especially when the travel business uses multiple payment gateways.
Klasha’s payment solutions for the travel industry
Klasha is an African cross-border payment solution provider committed to simplifying the cross-border payment experience for African and international businesses across various industries. In the travel sector, Klasha offers payment solutions designed to address travel businesses' unique payment challenges. These payment solutions include:
Pay-ins: Klasha empowers global travel businesses to seamlessly accept payments from African customers in their local currencies. Through Klasha's Pay-in feature, travel businesses can efficiently cater to their African clientele.
By integrating Klasha's payment gateway, African customers can conveniently pay in their local currencies. At the same time, travel businesses receive payouts in their preferred hard currencies, simplifying the payment process for all parties involved.
Fraud prevention and security measures: Klasha is PCI-DSS and ISO 27001 compliant. This means the highest level of protection from fraudulent transactions. With robust fraud prevention measures and data encryption techniques, businesses and travelers are safeguarded by ensuring that sensitive payment information remains protected throughout the transaction process.
Money transfer: Travel businesses in Africa can manage cross-border payments with Klasha’s money transfer feature, also known as Klasha Wire. This integral component of the Klasha Business Account empowers African enterprises to remit payments to their international business partners using their local African currencies.
Conversely, these partners receive the equivalent amount in their preferred hard currencies. This saves time as the transfer is often completed in T+1-3.
Pay-outs: Global travel businesses collaborating with African business partners can effortlessly send funds in local African currencies to their African counterparts through Klasha's Pay-outs feature.
This seamless process eliminates the need for hours of manual paperwork and the involvement of multiple currency vendors.
As the travel industry continues to evolve, so will the payment solutions that support it. Travel businesses that embrace innovative payment technologies will be better equipped to navigate the complex landscape of the industry and provide travellers with the seamless experiences they crave.
If you're in the travel industry and want to use Klasha for your cross-border payment needs, create a Klasha Business Account or speak to our sales team.