The Weavr team has been spending a lot of time recently working and sharing insights with experts from across the travel industry. From this, one sector-wide truth has been coming through loud and clear: airline refund claims on virtual card payments don’t fail because money is missing – they often fail because the parties cannot agree on the truth under pressure.
In our view, the time for fixing fragmented travel payment data is long-overdue; something that goes way beyond niche technical upgrades or incremental efficiency savings. We’re not saying that if booking, payment, and fulfillment data are unified, all of the fallout from being hit by a failed airline magically disappears. With a joined-up data ‘story’ however, it becomes much easier for travel businesses – including merchants of record who are on the hook for chargeback – to stop merely reacting to disruption and start managing it much more effectively.
Here are some of our thoughts on the travel industry’s payment data gap, and what can be done to fix it.
When airlines go bust… Analysing the risk context and the true nature of the problem for intermediaries
“I wish I could tell you we have a magic wand for detecting when an airline failure is going to happen. Unfortunately we don’t.”
In our recent webinar, Damian Alonso, Head of Product & Partnerships at Outpayce (Amadeus), summed up the ever-present threat of major supplier failure faced by travel intermediaries.
In a lot of cases, these failures come without warning. And it isn’t just Thomas Cook or Monarch-level total structural failures that travel companies have to think about. For instance, the September 2025 cyber attack on the Collins Aerospace MUSE platform caused mass disruption and cancellations across Europe. While the airline remains viable under this type of scenario, payments for what could be a large volume of disrupted bookings still need to flow, reverse if required, and reconcile cleanly, while minimising disputes and working capital exposure.
When a failure hits – whether it’s an airline bankruptcy, a cyber attack, or a major geo-political event – consequences for intermediaries include a spike in refunds, the triggering of chargeback liabilities along with, of course, an inevitable tightening of cash flow.
So what kind of problem are we dealing with here? At first glance, it’s easy to characterise all of this as a fairly obvious financial exposure issue. However, those consequences of supplier collapse (refunds, chargeback liabilities, and cash flow issues) are downstream effects, not causes. The upstream cause is simpler: if you cannot prove what happened, the system assumes the worst.
If you can preserve context as money moves, establish clear links between money paid in and out, and anchor risk to facts, it doesn’t prevent disruption – but it does prevent disruption from turning into chaos.
Isn’t this problem already solved with virtual cards?
Whether you’re a merchant-of record, an acquirer, or a non-MoR intermediary, one of the biggest problems with supplier collapse is unknown, unclear, or disputed exposure: i.e. the inability to assess how much you will be liable to pay out. The standard workaround for this is usually to put in place substantial rolling reserves; a big drain on financial resources in a sector where margins are already tight.
Virtual cards promise a safer and more efficient alternative to a system of pooled funds. A virtual card is issued to a single booking, capped at a fixed amount, valid only for a defined window and locked to a specific supplier. In this way, the problem of pooled funds and disputes spilling across bookings is eliminated. The virtual card model brings certainty: if an airline fails, only the cards tied to that airline and those bookings are affected.
If you are the MoR, you still owe the customer a refund when fulfillment fails. Virtual cards, however, offer you a clean, card-based recovery path against the airline transaction. In the case of non-MoR intermediaries, chargebacks flow to the airline’s acquiring relationship, and virtual cards make that boundary explicit and enforceable.
The chargeback conundrum
The increasing use of virtual cards by travel agents is often promoted as providing a guarantee – the chargeback, which provides the means to secure a refund in the event that future-dated services such as flights cannot be honoured. However, chargebacks do not result in automatic refunds – submitting complete and relevant data is essential to success. In practice, fully securing refunds in the event of airline failure is far from straightforward, and the chargeback element brings added complexity. We’re not saying that there’s anything wrong with the chargeback principle per se. Consumers obviously need a quick and reliable way to get their money back if things go wrong.
The problem with chargeback model however, is that it simply wasn’t designed specifically for travel. In our webinar, Livia Vité, CEO at actuary.aero, explained the issue with travel:
“It’s not as simple as perhaps normal goods and services where you know the delivery of the service or the goods is quite close to the time of purchase”.
In retail, you generally have a single merchant, a simple, defined product, along with immediate fulfillment. In contrast, flights are typically booked way in advance; bookings may be subject to multiple changes, and there’s the possibility of cancellation for reasons outside the merchant-of-record’s control. In other words, in travel, unlike in retail, things are a little more complicated. Travel breaks the assumptions inherent in the chargeback model.
In a value chain with so many intermediaries, the full data picture – the booking reference, the passenger name, the date of the flight, the merchant ID involved in the transaction – might be fragmented across multiple parties. When chargebacks are submitted without the full relevant data, they are more likely to be successfully challenged by the the airline, their administrator (if the airline is in trouble), and even the card acquirer of the airline which ultimately underwrites the losses.
In travel, the more fragmented the data, the more chargebacks are used, the more losses escalate, and the less anyone trusts the outcome. Until the industry connects booking, payment, and fulfillment data into a single spine, chargebacks will remain a less certain form of recourse, potentially giving a false sense of protection – a costly and blunt substitute for certainty.
Preserving unity across the chain
Under normal conditions, fragmented systems limp along. Under stress, they fracture. Not because the money disappears – but because the data needed to manage it never lined up in the first place. With the absence of a data chain comes a major visibility issue for all parties involved. As Livia Vité puts it:
“A lot of the losses that come out of this arise from a lack of data to understand what’s happening between the booking and the airline failure itself”.
In response to this, what travel businesses actually need is not another payment method, but a unified payments and data backbone – one that connects pay-in and pay-out, and preserves transaction context from the consumer all the way down the chain.
This is where platforms like Weavr fundamentally change the model. Virtual cards are just the starting point.
By embedding payments directly into the booking flow, Weavr ensures that:
- Consumer transaction data (who paid, for what, under what terms) is captured at source
- Booking, payment, and fulfillment data remain linked throughout the lifecycle
Funds can be programmatically allocated, controlled, and released based on real-world events - Risk is contained, not inferred
Travel payments don’t fail because they’re inherently risky. They fail because they’re blind.
Fix the data flow, and everything changes: refunds become faster, risk becomes manageable, reconciliation becomes automated, and payments shift from being a liability to a strategic advantage.
Fixing the data gaps that exist in your travel business can mean that refunds become faster, risk becomes manageable, reconciliation becomes automated, and payments shift from being a liability to a strategic advantage.
