Guest Post: How poor payment systems quietly drain cash flow

 Zoe Powell, director of travel, hospitality & leisure at Xeinadin, shares what travel firms can do about it 

In travel, we often talk about payments as a technology issue. But for small and medium-sized businesses, the real challenge is financial, and poor systems can quietly undermine cash flow. 

Abandoned bookings are the obvious example. Reports show that nearly 10% of under-34s abandon bookings when mobile wallet options aren’t available. If customers can’t pay the way they want, sales are lost. There’s also a knock-on effect because unpredictable income makes it harder to plan outgoings, manage staff costs and pay suppliers on time. Slow settlement from payment providers adds another layer of strain, with funds tied up for days or even weeks. 

I regularly see businesses using multiple, disconnected tools, which creates confusion when reconciling payments or issuing refunds. For operators where reputation is everything, a delayed refund can damage trust far more than a delayed booking. 

So, what can travel businesses do to protect cash flow? 

Shop around and compare terms 
Merchant acquirers are offering more favourable terms than during the pandemic, with shorter settlement times and less restrictive security requirements. Never assume you’re locked in with your current provider. We recently supported a client to move from a provider insisting on a trust account to one with more travel-friendly terms, easing cash flow immediately. 

Test the full customer journey 
Don’t just look at the technology dashboard, experience it like a traveller would. Mystery guest bookings can highlight issues such as missing wallet options, poor refund processes or confusing payment steps. Small fixes can make the difference between an abandoned booking and a completed one. 

Weigh up cost versus benefit
New systems often come with upfront costs or fees. You need to always be thinking about whether those costs are offset by faster cash flow, reduced reconciliation time or higher booking conversion. If the answer is yes, the investment is worth it. 

Rather than treating payment systems as an afterthought, they should be considered an essential part of cash flow planning. For SMEs in travel, where margins are tighter than ever before and working capital is essential, the right system can ease pressure and free up resources to focus on growth.