Payment fraud hits travel companies harder than most industries.
While merchants across sectors struggle with fraud, airlines and OTAs face unique challenges: high-value transactions, long fulfillment windows, and chargeback rates triple the industry average.
This guide cuts through the noise about travel and airline fraud prevention to focus on what actually works.
We examine how combining 3D Secure authentication with strategic chargeback prevention for airlines and OTAs can reduce fraud by 80%+ without sacrificing customer experience.
This dual approach addresses both sides of the fraud equation: preventing unauthorized transactions before they occur and efficiently handling the inevitable disputes that slip through.
The key innovation is in the intelligent application of these tools deploying stronger authentication only when risk indicators warrant it, while maintaining frictionless experiences for legitimate customers.
This balanced strategy not only blocks fraud but also optimizes approval rates, turning airline fraud prevention from a necessary cost center into a revenue-protecting asset.
Why Airlines & OTAs Are Prime Targets for Payment Fraud
Airlines and OTAs process high-value transactions (such as multi-flight bookings and vacation packages) with long service fulfillment periods.
Fraudsters exploit this gap between payment and service delivery to file chargebacks months later.
Common scams include stolen card bookings where fraudsters buy tickets with stolen credentials, leaving merchants liable when disputes arise; friendly fraud where customers falsely dispute legitimate transactions after using services; and account takeovers when hackers hijack loyalty accounts to redeem points for flights.
As a result, Airlines and OTAs face 3x higher chargeback rates than other industries, leading to fines, lost revenue, and potential account termination by acquirers like Visa or Mastercard.
The Hidden Cost of Chargebacks
A single chargeback costs travel merchants 2-3x the transaction value in fees, operational labor, and lost inventory.
For example, a $1,000 disputed flight booking could result in the original $1,000 refund plus a $25 chargeback fee, approximately $150 in labor costs to resolve the dispute, and a potential $500 loss if the seat can’t be resold.
These combined expenses significantly impact profit margins and operational efficiency beyond the visible transaction reversal.
How 3D Secure Protects You From Fraud
3D Secure for airlines and OTAs adds a layer of authentication by requiring customers to verify payments through their bank using methods like text message codes or biometrics. For airlines and travel agencies, this shifts fraud liability to the issuing bank when implemented correctly.
Travel merchants benefit as fraudsters typically avoid targets with these security measures in place. Banks trust authenticated transactions more, which reduces false declines. Most importantly, merchants aren’t financially responsible for disputed payments that were verified through 3D Secure.
FastoSafe’s solution offers easy integration to add this protection without complex coding requirements. Our system intelligently triggers authentication only for suspicious transactions, minimizing friction for legitimate customers while maintaining strong security where needed.
Chargeback Prevention for Airlines and OTAs
Why Proactive Prevention Beats Reactive Disputes
Fighting chargebacks after they occur is costly and time-consuming.
Instead, airlines and travel agencies should block fraud before authorization by using artificial intelligence to identify suspicious bookings before payment approval.
They can also implement real-time chargeback alerts to resolve customer issues before they escalate to banks. Additionally, automating evidence collection helps by storing delivery confirmations, IP logs, and customer communications for quick dispute response.
How FastoSafe Stops Chargebacks Before They Start
FastoSafe‘s platform combines machine learning and industry-specific rules to protect travel merchants.
Our pre-authorization fraud scoring analyzes numerous data points including device fingerprinting and travel patterns in milliseconds.
The system also provides automated dispute response capability to submit compelling evidence to acquirers within hours.
For added security, FastoSafe offers a chargeback guarantee, covering dispute costs if their tools fail to prevent illegitimate chargebacks.
Why Airlines & OTAS Trust FastoSafe
Tailored for High-Risk Travel Payments
FastoSafe offers seamless PMS/booking engine integration, connecting to Amadeus, Sabre, or custom systems in less than one day. Our multi-layered protection combines 3DS, biometrics, and behavioral analytics for comprehensive security.
Protect Revenue & Acquirer Relationships
High chargeback ratios (over 1%) put merchant accounts at risk. FastoSafe helps clients maintain ratios below 0.3%, ensuring uninterrupted payment processing.
“Travel Industry Fraud Protection Is a Revenue Driver”
“Many travel startups see fraud tools as an expense, but proactive prevention directly improves approval rates and customer trust. With FastoSafe, airlines recover 15-20% of revenue previously lost to false declines.” – Dennis Pedersen, CEO of Fasto.
