It costs a fortune for the travel industry to get paid in Africa. The average travel and tourism business spends 12% of its revenue on getting paid. Frequently, this is the difference between making a profit or a loss and dramatically affects the viability of many businesses in a sector that employs over 6 million people in Africa.
Payment companies in Africa often classify travel and tourism businesses as high-risk. As a result, they charge these businesses a fee ranging from 3.5% to 6% to process payments from international cards. Furthermore, cardholder banks also charge their clients a 4% fee to convert funds into African currencies.
Payment companies in Africa often classify travel and tourism businesses as high-risk. As a result, they charge these businesses a fee ranging from 3.5% to 6% to process payments from international cards. Furthermore, cardholder banks also charge their clients a 4% fee to convert funds into African currencies.
Therefore, the total cost of billing international cards for travel and tourism businesses in Africa can often exceeds 7%.
Online travel agencies like Booking.com and Airbnb charge a 15% —20 % commission, often by competing with hotels' websites for what would otherwise have been direct bookings. These gatekeepers make building a profitable travel and tourism business in Africa much harder.
Online travel agencies have an unfair advantage when it comes to payments.
Online travel agencies (OTAs) such as Booking.com are large multinational organizations with the advantage of being able to bill clients in their local currency and negotiate lower card fees. For instance, if a European customer books a South African hotel through Booking.com, the website can bill the card in Euros in Europe, where payment processing is much cheaper, resulting in a card fee of around 0.3%. However, if the hotel bills the client's card using an African payment company, the transaction fees could easily amount to over 7%.
Thus, payment fees for African hotels can be as much as 20 times higher than those paid by Booking.com.
TurnStay is democratizing access to global payment infrastructure.
Founded by experienced entrepreneurs Alon Stern and James Hedley,
TurnStay's mission is to help travel and tourism businesses radically reduce the cost of getting paid by providing access to the same tools used by the world's biggest booking companies.
Lower card fees Utilizing a network of compliant companies worldwide, TurnStay bills international clients in their currency and country, reducing the cost of accepting international payments by 70%.
Better checkout experience International banks frequently block transactions from Africa, resulting in conversion rates that are less than half the industry standard. TurnStay creates a localized payment system, charging clients in their currency using familiar payment methods, thus halving the number of unnecessary failed transactions.
More direct bookings Travel and tourism businesses need a seamless checkout experience on their website to compete with OTAs. TurnStay has partnered with leading booking engine providers such as Sleep Easy 365, Profitroom and Benson Software, who help our clients improve conversion rates for direct bookings.
Travel platforms can embed TurnStay's payment functionality, allowing them to reduce the fees their clients pay whilst improving conversion rates.
