UK travel agencies are collectively spending over £100 million annually on card‑processing fees, according to new estimates, a burden that is only growing as consumer spend continues to rebound across tourism sectors.
According to the Office for National Statistics, tourism related in‑person card spending including travel agent transactions, accounted for around £84 billion in June 2025 alone. With travel agents comprising just a small slice of that, industry insiders estimate that agencies bear a heavy proportion in transaction fees, often ranging between 1% to 3% per booking .
As total consumer card spend in tourism hit hundreds of billions yearly, even a 1% processing fee translates into tens of millions in costs across the sector, funds which might otherwise fuel marketing, staff training, or tech upgrades.
Soaring Transaction Volumes Drive Costs Higher
Recent Visa/ONS data shows domestic tourism related card spending has returned to pre‑pandemic levels, around 6.1% of all face‑to‑face spending in 2025. With prepaid holidays and online bookings becoming the norm, agencies are handling more high value and an increasing number of small value, contactless payments, both prone to higher aggregated fees.
Unseen Drag on Profit Margins
Travel agents frequently process full payments upfront (e.g., flights, hotels), so a 2% fee on a £2,500 booking equates to £50 per transaction. Multiply this by thousands of bookings annually, and agencies are left questioning whether that money could be better spent elsewhere.
Spotlight on “Compare Card Fees” But It’s Just One Part of the Puzzle
Platforms like Compare Card Fees have stepped in, offering travel sector businesses transparent comparisons of merchant account providers and tailored contract reviews. Industry sources say travel businesses switching via such services can reduce processing fees by 20–40%, potentially saving £20–£40 million across the industry.
However, travel‑news.co.uk research shows that while Compare Card Fees provides real cost-analysis, this is part of a broader need for overall fee visibility and competition. In a market with opaque pricing, any service that promotes transparency helps businesses make informed decisions and keeps providers honest.
“We cut our processing costs by nearly a third ,” says one mid‑size travel agency owner who used the free Compare Card Fees service.
Why It Matters Now
With consumer spending in the tourism sector back at 2019 levels and contactless payments prevalent, processing fees are a significant and rising fixed cost, one that rarely features in strategic planning. As travel agencies adapt to razor‑thin margins and inflationary pressures, mitigating these payments costs isn’t optional, it could be the difference between growth and stagnation.
A Call for Cost Transparency and Industry Action
Travel industry bodies and fintech watchdogs are being urged to:
- Promote standardised merchant fee disclosures, especially for high‑risk verticals like travel.
- Encourage agencies to audit processing terms annually.
Facilitate platforms that demystify pricing models, ensuring agencies pay less for every booking made.
