Subscription vs. Travel Payment Cards: Which Loyalty Model Really Wins for OTAs?
- Vivian
- 5 days ago
- 6 min read
Updated: 2 days ago
Travellers happily use Google Flights and Metasearch sites to search, compare and dream, then jump to OTAs or Airline sites to actually book. In this context, OTAs don't lack traffic, but rather loyalty (and healthy margins). A solid OTA loyalty strategy is not a “nice to have”, it is the only way to escape the "paid‑click race" and the "lowest fare war".
Today two emerging (and bold) loyalty models sit on the table for OTAs: subscription programs like eDreams Prime or Travelstart+, and OTA‑branded payment cards enabled by embedded finance and cards‑as‑a‑service. Both have potential. However both also have challenging limitations, especially in Europe.
OTA Travel subscriptions: strong, but mostly mathematical
Travel subscriptions are proven. eDreams Prime shows that subscribers can drive most bookings and a big share of profit when the model is pushed hard. Travelstart+ uses a similar idea with monthly fees, vouchers, discounts and concierge in South Africa. The logic is simple. Subscribers pay a fixed fee and are more likely to book where that fee “pays back”.
The problem is that this loyalty is almost fully mathematical. Each member asks “Did I save more than I paid?” If they travel less one year, see better prices somewhere else, or doubt that discounts are real, they cancel. The bond is financial, not emotional.
There is also a trust risk. If member prices and public prices are hard to compare, customers can feel tricked. Then the subscription looks like a pricing trick, not a benefit. To keep trust, the value must be clear, measured and easy to check.
Subscriptions fit OTAs with strong brand awareness, solid price competitiveness and clear repeat use. They are less suited to small OTAs with low repeat traffic or weak pricing power. For those players, a wide subscription offer can create more churn and complaints than real loyalty.
Travel Payment cards: habit and data
An OTA‑branded payment card works in a different way. Thanks to embedded finance and cards‑as‑a‑service providers, an OTA can issue a debit, prepaid or credit card without its own banking licence. A partner such as Mbanq acts as issuer and BIN sponsor, connects to Visa or Mastercard, and handles KYC, AML and compliance. The OTA keeps control of product design, rewards and user experience.
For travellers, it is rather simple. They apply in the app, get a virtual card in their phone wallet, and use it for flights, hotels or any daily purchases. Every transaction earns points or travel cash-back that can only be used with that OTA. Over time, everyday spend turns into nights, upgrades or extra services.
This creates habit‑based loyalty. A subscription is reviewed once a year. A card sits in the wallet every day. People usually use two or three cards for most spend. If your card clearly gives better travel value, it can become one of those default cards.
A card also adds a new income stream. In the EU, consumer interchange is capped, often around 0.2–0.3%. After sharing with the bank, an OTA might see 0.1–0.2% of total card spend. If one customer spends €10,000 a year, that is €10–20 for the OTA. At 100,000 active cards, this means €1–2 million a year before costs, plus indirect gains from better data and higher share of travel wallet.
On its own this is not huge. That is why card‑linked cash-back matters.
Card‑linked cash-back and the Boogi effect
Platforms like Boogi add a second income stream. They connect the card to many retailers who fund cash back on purchases. When a customer pays with the OTA card at a partner merchant, the merchant pays a commission. Boogi tracks the spend and shares part of that money with the card programme.
This merchant‑funded cashback can add another 0.5–3% of spend on eligible transactions. Only part of card spend will hit those merchants, but even so, total value per euro of spend can double or triple. The key point is that rewards are funded by the merchants, not from the OTA’s own margin.
For a European OTA this combination—capped interchange plus card‑linked cash-back plus extra travel revenue—turns a card from a nice idea into a more realistic business case.
Who should and should not launch a Travel Payment card?
Good candidates are large or fast‑growing OTAs with millions of active users, strong brand recognition and clear repeat purchase behaviour. Their customers book several trips a year or use them as a main hub for travel. With this scale, per‑card spend becomes meaningful and the OTA can negotiate solid terms with banks and partners like Boogi.
Borderline candidates are mid‑size leisure OTAs with thin margins and low repeat. Their typical user books once a year and shops on price. For them, a consumer card is likely to bring low activation and low usage. The cost and complexity can be higher than the gain.
Poor candidates are OTAs that still struggle with basic payments, refunds, fraud or support. A card programme adds regulated processes, new failure points and more demanding customers. Until the basics are stable, a card will only amplify problems.
For these OTAs, a more realistic path is to first improve payment flows and subscription design, then explore B2B virtual cards for supplier payments, and only later consider a consumer travel card.
Real risk scenarios OTAs must accept
A travel card brings clear risks.
Regulatory risk: rules may change. Interchange caps could move, or new consumer rules could limit fees or pricing structures. A loyalty plan that depends only on today’s fee structure may suffer later.
Credit and fraud risk: the issuing bank holds the licence and balance sheet, but the OTA holds the brand. Poor underwriting or weak fraud controls hurt the bank’s P&L, yet angry cardholders will often blame the OTA whose logo is on the card.
Execution risk: bad KYC flows cause sign‑up drop‑off. Weak integration between OTA and issuer systems can break bookings or payments. Internal alignment between product, marketing, legal, compliance and finance can take many months.
Partner risk: if the issuer or Banking As A Service partner faces outages or regulatory issues, the OTA’s brand suffers and the programme may need to be re‑platformed under pressure
What about Travel Payment co-branded card?
A third option sits between “full own card” and “no card”: a co‑branded travel card with a bank. This is the model Expedia, Booking.com and Priceline use in the US, where the bank is clearly in charge of issuing and credit, and the OTA brings the brand and customers. For a Euro‑based OTA, a co‑brand can lower complexity and speed up Go-To-Market, because the bank handles most regulatory and risk work, and often adds its own insurance and service package. The trade‑off is control and economics: the bank keeps a larger share of interchange and fees, decides many product rules, and often pushes its own app as the main place to manage the card. For some OTAs this “light touch” is a good first step into cards; for others it weakens the goal of building deep, direct loyalty around their own platform.
Ultimate OTA Loyalty Model: Subscription, Co‑Branded Card or Own Travel Card?
On ease of launch, subscription still wins. It uses what you already have and does not need a bank. A co‑branded card with a bank sits in the middle: harder than a subscription, easier than building your own card programme. The bank carries most of the regulatory and risk load, but also keeps more of the economics and controls much of the product. A full own‑brand OTA card is the hardest option: it takes longer, needs strong partners and adds real operational weight, but it also gives you the deepest data, the strongest habit and the tightest link between spend and your platform.
For the few OTAs with the right scale and repeat behaviour, the best long‑term play often mixes all three: a transparent subscription for heavy users, a co‑brand or own card to capture spend, and card‑linked cash-back to make the economics work in Europe. For many others, the honest answer today is to master subscriptions first, consider a simple co‑brand only if a strong bank partner is keen, and treat a fully fledged OTA‑branded card as a later, high‑commitment move once the business and brand are ready.
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