As the world's leading blockchain payment processor, we get to discover interesting ways Bitcoin (BTC) and Bitcoin Cash (BCH) can solve payment problems for whole industries.
In the last few years, we've found that blockchain payment methods are taking off in the travel industry. Just in the last year, we've seen the total amount of Bitcoin and Bitcoin Cash spent with BitPay travel industry merchants grow by 280% (March 2017 vs March 2018).
In this post we take a look at what makes blockchain payments great for travel businesses, and we profile some of the early adopters.
The pains of travel payments – and the blockchain solution
Blockchain payments are helping to solve some deep-rooted problems with transactions in the travel industry.
Many plane ticket purchases and hotel bookings today happen online, and often transactions are high in dollar value. Credit card fraud hits high-value purchases especially hard, costing billions of dollars annually (over twenty billion dollars in 2016) to the global business community. Now a growing number of travel businesses are open to credit card alternatives.
There are a few problems a blockchain payment method like Bitcoin is ideally suited to solve for companies in the travel space:
1. Countries without credit card adoption
There are still many places in the world where credit cards aren't widely adopted or available, but where Internet access is becoming ubiquitous. Bitcoin and Bitcoin Cash are perfect ways to accept payments from customers in these emerging markets. These universal currencies work anywhere the Internet is available. And users can send funds across the globe without needing country by country currency exchange.
2. Payment fraud and chargebacks
Credit and debit cards are subject to high risks of fraud and chargebacks, creating higher time, opportunity, and financial costs for merchants to accept payments. Those higher costs often get passed on to customers in the form of higher prices. Nobody wins.
Blockchain payments carry none of these risks. When a customer transacts with Bitcoin or Bitcoin Cash, the transaction itself contains no sensitive information. There are no fraud and PCI compliance costs for businesses and no risk of identity theft for customers. And since Bitcoin and Bitcoin Cash are "push" payment methods, there is no risk of chargebacks.
3. Credit card fees
With their fraud prevention costs, credit card processors have overhead. That overhead shows up in the processing fees which merchants pay, which are often around 2-3%.
The currency exchange required for international transactions also costs money, and the cost is often passed on to credit card users in the form of fees. Users can pay up to 3% if they try to pay a business outside of their own borders.
Blockchain payments can breeze by these costs. BitPay only charges a 1% processing fee to merchants, and customers in 240 countries can choose to pay BitPay merchants with blockchain sending fees of pennies or less.
Meet the early adopters
From flight booking to room rentals, BitPay’s travel merchants allow you to leave home, fly high, and settle in at your destination – all using Bitcoin or Bitcoin Cash. Let us introduce a few of them.
Available in 92 countries, Destinia is a powerful booking site for flights and hotels. Destinia has accepted payments with BitPay for years, and their experience yields some interesting insights about Bitcoin and Bitcoin Cash travel spending. For instance, from 2014 to Q1 2015, Destinia's Bitcoin customers spent 35% more than credit card users and 50% more than PayPal users.
Destinia is a fan of what Bitcoin can do for payments. Their site even provides customers with an excellent explanation of what sets Bitcoin apart and how it works for Destinia bookings.
With over six million homes for rent worldwide, 9flats.com is an amazing accommodation option for travelers – especially visitors to Europe. Founded in 2011, 9flats has been accepting Bitcoin via BitPay since 2013.
Touting its innovation, airBaltic is proud to accept blockchain payments. You can use your Bitcoin and Bitcoin Cash to purchase tickets to sixty different countries.
"Introducing the Bitcoin payment option is a part of our innovative approach to service with a central focus on our customer.” – Martin Gauss, airBaltic CEO
We try not to have favorites, but Virgin Galactic makes it hard. Who wouldn't be excited about a company that lets you buy a ticket to space with Bitcoin and Bitcoin Cash?
Sir Richard Branson shared our optimism in his post about Virgin Galactic's decision to accept Bitcoin:
"While the world of travel is rapidly advancing, the world of payments is changing fast too. . . Sometime in the future, innovative payment models such as Square, Clinkle and Bitcoin will become serious challengers to traditional banks, which will spur more competition and give customers even more options."
How BitPay powers blockchain travel payments
Why do all these merchants choose to use BitPay?
With our platform, travel businesses can accept blockchain payments from Bitcoin and Bitcoin Cash users in 240 countries and territories. And with our guaranteed exchange rate, we protect businesses from any risk of digital currency price volatility while delivering on-time bank settlements in local fiat currencies.