Having to be mindful of hidden and unexpected fees when making a payment is an unfortunate reality for businesses and consumers alike. Travel businesses, however, are getting hit extra hard, found new analysis from B2B payments firm eNett, and those hidden fees are costing companies big time.
A report released on Tuesday (May 17) said travel companies are getting hit with hidden fees and surcharges when paying suppliers, especially those that are across borders. Manual reconciliation and legacy payment tools are also burdening these businesses, researchers found.
All in all, it results in thousands of dollars a month for each firm in extra costs.
Travel agencies could be paying up to 3 percent more on cross-border transactions thanks to hidden fees from their payment providers, according to eNett. For a travel company spending about $10 million a year on supplier payments, as much as $300,000 of that spend could be due to hidden fees and markups.
The risk of supplier default and foreign exchange, coupled with unexpected charges, led to significant losses, eNett researchers added.
“Having facilitated tens of billions of dollars in payments across the travel industry, we thought it was about time the true cost of payments were brought to light,” said eNett CEO and Managing Director Anthony Hynes in a statement. “Too many travel companies are just accepting costs on face value. Taking the time to understand and perform a deeper analysis of costs and challenging vendors to provide greater payments clarity on their charges will provide them with a true view on the real cost of payments.”
In conjunction with the release of this research, eNett is also rolling out an online portal to help travel companies see a broken-down analysis of their payments, along with other educational resources, to help bring transparency to cross-border B2B costs in the travel sector.
According to the company, greater transparency could mean recovering up to two-thirds of the funds lost through these unexpected and unnoticed fees.