A staggering 96% of European travel leaders believe their current payment processing systems fall short, according to the latest research by Scottish embedded payments firm, Modulr.

According to the Edinburgh-based fintech, these inefficiencies are costing companies excessive fees and valuable time, with nearly half (44%) losing over 1.5 hours per week per employee – with larger organisations reporting losses often exceeding two hours weekly.

While consumer travel payments have been rapidly transformed by rapid growth in mobile wallet adoption, introduction of Open Banking at checkout and other innovations, business-to-business (B2B) payments continue to be severely held back by outdated, broken, and fragmented system and infrastructure.

Consequently, 97% of respondents are sure their business is wasting resources due to inefficiencies or limitations in payment processing, with 91% not seeing clear growth opportunities with current payment processing methods.

Persistent Inefficiencies Having Tangible Consequences for Businesses

The research found that nearly one-third (28%) of respondents report losing customers or facing increased exposure to fraud as a direct consequence. More than a quarter (27%) believe that avoidable fees and restricted market access are further limiting their growth opportunities.

These challenges are compounded by widespread concerns about disruption, including competitive pressure, technological advancements, regulatory changes, fraud risks, and rising costs – over 90% of respondents express concern in these areas, with nearly 40% describing their concerns as extreme.

“Access to efficient payment services for travel businesses is fundamental to continued growth in the sector,” comments Jakub Zmuda, director of strategy at Modulr.

“”Our research shows a sector caught in a perfect storm of manual processes, rising fraud risks, and growing customer expectations – all while battling to stay competitive in a rapidly evolving marketplace.

“This isn’t just about regaining the hours lost to inefficiencies; it’s about rethinking payment strategies to foster critical partnerships, streamline costly operations, and unlock the potential for growth and resilience in a hugely competitive global market.”

Geographic disparities also emerge in the research. The manual reconciliation issue is most acute in the UK, where 60% of travel companies report spending between 21-30 hours each week – nearly double the time spent in France (34%).

When it comes to hours spent per person on payment tasks, Italian businesses report the highest inefficiencies, with 25% saying their teams lose more than three hours per person per week – in stark contrast to the UK where that figure measures only 5%.

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Despite the availability of automated systems, only 17% of businesses have adopted automatic supplier payments. The majority continue to process payments in bulk (64%) or on an ad hoc basis (19%), creating downstream issues with suppliers and compounding inefficiencies.

While virtual cards are viewed as the immediate future of travel payments by all respondents, only 60% believe they work effectively in their current form. The remaining 40% call for change to unlock their full potential.

Zmuda continues, “The time for positive change is now – the solutions are already out there.  Travel businesses must adapt by prioritising automation, staying nimble and responsive to market needs as part of their payment strategies.

“As traveller expectations evolve, embedding payments solutions that offer a mix seamlessly connected payment options will be essential for managing the complex and fragmented nature of global travel payments.”