The impact of Covid and now the cost-of-living crisis has seen payments processing companies dial down their exposure to travel or even abandon the sector all together.

This has left many agencies and operators struggling to find merchant services that work for them commercially as payments firms price in the perceived risk inherent in travel.

But UK-based fintech DECTA sees this reduced appetite for risk in the market as its “time to shine” as it vows to maintain its commitment to travel, and cruise in particular.

“Looking at the market from the perspective of the last four or five years, I would say the worst is over as Covid becomes a memory,” he says.

“But we are not out of it yet. Inflation is high and growth is slow. We are technically not in a recession but people’s money is not going as far as it would have historically.

“Yes, we are seeing some positivity in the market, but I think we are coming up for a few slower years. That’s just the nature of the economy. People are going to travel less.”

Growing UK awareness

“The past few years have been phenomenally difficult and a lot of payments companies have de-risked their business simply through disassociation as opposed to activity.

“A lot of businesses have been affected and have struggled to find payment options and a good processor that’s prepared to work for them.”

DECTA says it assesses risk on a case-by-case basis and while is it large enough to have resources to invest in the latest technologies, it is small enough to offer a bespoke service.

DECTA was founded seven years ago and has a base in Latvia from where it operates its own payments processing centre and builds and maintains its own technology.

“Because we have our own technology we can control our own fate, our own risk appetite and what we can provide our merchants which is why we are bespoke,” Dawson adds.

“Covid affected everyone but we did not have to de-risk our travel portfolio. Because our approach is specific to each of the businesses we work with we had managed risk.

“And we had the data to work with our merchants to support them through the dark times.”

Dawson adds: “Travel makes up a healthy percentage of our overall revenues. The business is profitable and we have done very well in the UK marketplace.

“But our brand authority is not as strong as it should be in the UK, in particular. We are big enough to have resource but small enough to be bespoke. We are not in the business of onboarding ten thousand merchants per month nor do we want to be.”

Eliminating risk

Innovation in payments, like open banking and bank-to-bank transfers through API connectivity, is becoming more widely adopted in travel because it reduces risk.

Dawson believes these developments, while not taking off as expected, are now “coming into their own” and for travel and cruise firms mean the risk of chargebacks is eliminated.

During Covid lockdowns consumers increasingly turned to their legal right to automatically reclaim money paid on credit when firms were unable to refund travel that was cancelled.

“Covid put a lot of things in perspective,” says Dawson.