Why Payments Have Become a Lever in Airline Distribution

This sponsored content was created in collaboration with a Skift partner.

Airlines run on a simple imperative: fill seats. But what determines how and where those seats get sold is changing. Route planning, pricing, and promotions have all been calibrated around that goal, with distribution strategy as fundamental to moving inventory.

However, the distribution landscape is changing. Tickets are no longer sold through a narrow set of channels, and the path from search to purchase is far less predictable. Online travel agencies (OTAs), corporate booking platforms, and newer digital layers now sit between airlines and their customers. 

Travelers now expect the same instant, localized, and seamless payment experiences they encounter in other industries, adding new layers of complexity to an already fragmented booking process.

Each additional intermediary introduces new considerations around accountability, reconciliation, and revenue capture. In many cases, payment infrastructure is becoming the limiting factor in how quickly airlines can onboard partners, expand globally, or adapt to new distribution models — and, in turn, how quickly they can capture demand. 

“The way transactions are structured across distribution channels is becoming an increasingly important commercial lever in the industry,” said Jay Dearborn, chief strategy officer and chief operating officer, international at WEX. “It’s often invisible, but it plays a growing role in bridging legacy systems with modern traveler expectations.”

SkiftX spoke with Jason Hancock, managing director of WEX Global Travel, about how that shift is influencing the airline industry.

SkiftX: How is digital retailing reshaping airline distribution, especially in terms of where payments sit and who controls the transaction?

Jason Hancock: Digital retailing is changing how travel is sold. We see a growing focus on the idea of a connected trip — bundling different components to create a seamless traveler experience. At the same time, airline distribution now spans a wider range of channels, from Global Distribution Systems (GDS) to direct connections, web services, and New Distribution Capability (NDC), creating a more fragmented and operationally complex landscape.

Travel intermediaries account for a large share of airline bookings. Historically, payments in this indirect channel were embedded in legacy systems and closely tied to the booking and ticketing process. However, travelers now demand more flexibility and choice. As a result, travel intermediaries need to support a wider range of payment options. 

The volume and complexity of these payments, across different currencies, markets, and security requirements, often exceed what many legacy systems were designed to handle.

Where are current payment models starting to break down for airlines and travel intermediaries today?

Many of the challenges trace back to legacy systems built around batch processing and designed for a very different era, before dynamic pricing, instant fulfillment, and modern payment methods became the norm.

Those systems weren’t built to support the range of payment types now expected, such as mobile wallets and modern checkout experiences, creating a growing mismatch between capability and demand.

That gap becomes even more visible during disruptions. Air travel is inherently irregular, with cancellations, rebookings, and refunds happening frequently. Legacy systems struggle to manage that effectively. Processes are often manual and error-prone, creating friction for both airlines and travelers and slowing down resolution at critical moments.

As more travel intermediaries enter the ecosystem, how is transaction ownership evolving, and who ultimately holds the associated responsibilities?

The transaction lifecycle is becoming more fragmented, with different parts of the payment and servicing process owned by different parties. This increases the risk of delays, errors, and unclear accountability. There needs to be a single party responsible for the end-to-end payment experience — including accepting payments, managing refunds, and resolving issues — consistent with customer expectations in other areas of digital retail.

That model requires the right infrastructure, with automation and strong risk management across the ecosystem. There’s a growing need for parties to step in as the accountable owner, taking responsibility for managing that complexity across the full value chain.

How does the merchant-of-record model shift transaction ownership, and what new opportunities does it unlock for airlines and their partners?

The merchant-of-record model is one of the most important structural shifts in digital retailing. When a travel agency or travel intermediary operates as the merchant, it collects payment from the consumer and then pays its suppliers, giving it end-to-end ownership of the transaction.

That simplifies accountability across the ecosystem. For travel intermediaries, that means delivering a single payment experience across a basket of travel products and greater operational efficiency. For airlines, it means driving more sales, gaining access to new markets, and reducing payment-related burden. For travelers, it means more choice, less friction, and a single point of accountability with a travel partner they trust.

Where is the biggest gap between what airlines can support today and where travel commerce is heading?

The biggest gap is the disconnect between the ambition to act as a retailer and the operational reality of delivering that consistently across multiple markets. Airlines are investing heavily in dynamic, real-time retailing and in their direct channels, and rightly so. However, doing that on a global scale is extremely difficult, especially when it comes to supporting localized payment methods and wallets at checkout.

That is where travel intermediaries step in. Acting as a merchant of record, they offer global reach, flexibility, and a wider range of payment options. There’s a role for both direct and indirect channels, but the gap remains between retailing ambition and the ability to deliver at scale.

Where does WEX fit within the transaction flow, and how does it help airlines and partners manage global payment complexity?

WEX sits at the center of the transaction as an intelligent payment partner. With multiple parties involved across the booking lifecycle, WEX links airlines and other travel suppliers to the broader distribution network by embedding payment capabilities directly into travel workflows, deploying our scalable global payment infrastructure to enable more seamless transactions throughout the end-to-end journey.

Instead of travel intermediaries having to manage hundreds of supplier relationships, currencies, and payment requirements, WEX simplifies this into a more standardized, scalable B2B payment experience, enabling travel intermediaries to pay suppliers globally while managing that complexity at scale.

At the same time, WEX provides secure, tokenized payment capabilities and works closely with both travel intermediaries and suppliers across the ecosystem. That infrastructure underpins models like merchant of record and supports more modern distribution approaches.

How do these changes translate into tangible business impact, whether in speed to market, partner onboarding, or revenue capture?

If it’s easier to pay, it’s easier to sell. Virtual cards, which sit at the core of what WEX does, are often seen as just a payment method, but in this context, they act more as a strategic layer within the distribution process. They support models like merchant of record and help modernize how travel is sold.

For travel intermediaries, that can mean simpler reconciliation, better-structured data, improved risk management for forward bookings, and greater automation. For airlines, it can mean access to incremental demand through intermediated channels, more secure and predictable payment settlement, and reduced exposure to fraud, which is managed by the travel intermediary.

One underappreciated benefit is the quality of data these virtual card transactions generate. That visibility across the full transaction lifecycle can be used to improve performance, e.g., through better customer targeting, and enable critical decision-making.

Looking ahead, how might AI-driven and agentic commerce reshape airline distribution, and what role will payments play in enabling this next phase?

AI and agentic commerce will accelerate many of the trends already underway, particularly the shift toward more dynamic, personalized, and increasingly autonomous booking and servicing, with agents increasingly managing transactions.

Payments must evolve alongside that, creating new challenges in technology, data, and, especially, governance. In a highly regulated space, clear accountability is essential when an agent acts on behalf of a traveler. 

There is also the opportunity for payments to act as a ‘control layer’, determining when and how money moves through these workflows. Tools like virtual cards support this by offering security, flexibility, and seamless integration. Ultimately, progress will depend on trust and on how well governance and accountability are defined.

But more fundamentally, it will depend on whether airlines and their partners have the payment infrastructure to support it — because that infrastructure is increasingly what determines how, and how fast, they can compete.

To find out more about WEX, visit wexinc.com/industries/travel/.

This content was created collaboratively by WEX and Skift’s branded content studio, SkiftX.