SINGAPORE, 29 October 2026: The International Air Transport Association (IATA) has released new data demonstrating the rising cost burden of payment processing.
Airlines worldwide incurred USD24.5 billion in payment costs to process USD1.05 trillion in sales in 2025, a 10.4% increase from 2023.
That far exceeds the overall growth in travel sales over the same period, which rose 7.7% to USD977 billion in 2023.
The average cost per transaction was USD5 per passenger. In comparison, IATA forecasts that airlines will make a net profit of USD4.50 per passenger in 2026.
“The airline industry is hyper-competitive, capital-intensive, and famously low-margin. In such an environment, every cost item needs careful review. 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,” said IATA’s Interim Director General and CFO Sandrine Le Borgne,
Further analysis of the USD24.5 billion cost of payments in 2025 revealed that:
- USD20.7 billion (84.5% of the total) covered payment fees and the direct cost of completing each transaction.
- USD2.9 billion (11.8% of the total) was related to airline operating costs, including various payment systems, delayed cash flow, staff, and compliance.
- USD0.9 billion (3.7% of the total) was lost due to fraud or uncollected sales.
Cards had the highest cost per transaction, with average payment fees of 2.53%, higher than the estimated overall average of 1.97%. The lowest-cost payment option was 0.01%.
IATA is exploring several solutions and guidance that will bring efficiency to payments to airlines, including:
Introduce alternative, lower-cost payment methods for passengers. The 2025 IATA Global Passenger Survey found that 29% of passengers prefer a digital wallet and 8% prefer a local instant payment solution.
IATA Pay and IATA Financial Gateway (IFG) help airlines meet the challenges of changing passenger payment preferences. IATA Pay lets passengers use local instant payment solutions to purchase travel and is rolled out in 34 countries with 38 payment schemes. IFG is a platform that lets airlines and travel suppliers manage, optimise, and control travel industry payments across multiple sales channels in more than 170 countries, using 300-plus payment methods.
Improve transparency on agency card costs. Transparency In Payments lets airlines define their payment policy and framework within the IATA Billing & Settlement Plan (BSP). This lets airlines decide whether to accept an agency card as an alternative to a customer card or other cost-effective BSP options, such as IATA EASY PAY.
Make corporate travel more cost-efficient. Taking the opportunity presented by the industry move to Offers & Orders, IATA is working with airlines and corporate customers to develop a new approach to corporate travel payments, designed to improve payment efficiency, simplify reconciliation, and provide richer data, while giving airlines and their corporate customers greater choice in how payments are managed.
Help airlines evaluate their payment options. IATA has developed the new Airline Payment Framework – Management Foundation, which will help airlines align commercial, financial, and operational priorities to ensure payments support both customer experience and financial performance needs.
“In addition to cost-efficiency, IATA research shows that providing passengers with alternative payment methods could also have a revenue-generating impact. About one in five ancillary purchase attempts are not completed because the initial payment attempt was refused and no other method was offered. Enabling more payment options has the potential to help airlines realise some of this lost revenue,” said Le Borgne.
(Source: IATA)
