A new innovation in B2B payments offers airlines $2 billion a year

The report follows the launch of Nium Airline Payment (NAP), a closed-loop B2B solution underwritten by Air Europa that avoids harmful surcharges and restrictive no-acceptance policies

Nium, the global platform for moving modern money, today released a report revealing how new "closed-loop" B2B payment solutions for sharing payment costs more equally between airlines and travel sellers could provide a much-needed economic boost to the industry.

The 14-page, free-to-download report, Closing the loop for air travel: a new payments model for airlines and online travel agencies, reveals that in 2019 airlines spent $20.3 billion in payment costs, roughly equivalent to 78% of the net profit of the sector.

A significant portion of that sum is produced as a result of costly, outdated, and very slow “double-loop” payment ecosystems, plagued with late fees, acceptance issues, fines, and rejected payments.

However, by embracing new "closed loop" payments technology, a sustainable and equitable payment model that closes the door on surcharges and business-restricting no-acceptance policies, airlines could save up to $2 billion year.

"One of the biggest conundrums of airline distribution in the Internet age has long been: do I increase my distribution at the cost of accepting high pay rates, or do I limit distribution to those who have low pay costs but lower fees?" Selling opportunities across the board?This problem disappears with the development of closed-loop payment solutions, enabling airlines and travel sellers to collaborate more equitably and sustainably, saving airlines up to $2 billion per year at a time when returning to profitability is more important than ever," says Spencer Hanlon, Head of Travel at Nium. 

The report follows the recent launch of Nium Airline Payments (NAP), a closed-loop payments solution powered by Universal Air Travel Plan (UATP).

Among the first to contract Nium's solution is Air Europa, which has turned to the global payments company to address some of the inequalities associated with traditional card payment models.

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