Insights from Peny Rizou on Balancing Risk and Revenue

Fraud in the travel industry functions as a persistent structural challenge rather than a periodic operational cost. Travel operators navigate a unique environment characterized by high-value transactions, cross-border payment flows, and instant digital fulfillment. Unlike physical goods that require shipping and allow time for manual review, airline tickets and hotel reservations are often confirmed within seconds of payment authorization.

The compressed timeline leaves merchants highly exposed. Fraudsters exploit the brief authorization window, knowing that post-transaction intervention is virtually impossible once an itinerary is issued and a passenger boards a flight.

According to Peny Rizou, Chief Fintech Officer at Etraveli Group, this exposure is not an accidental byproduct of digital commerce. It stems directly from the operational characteristics specific to how travel products are sold and paid for globally.

The financial stakes are disproportionately high compared to other digital commerce sectors. Recent industry data indicates that airline payment fraud losses exceeded $2.4 billion globally in 2024, with fraudulent transactions representing approximately 0.8 to 1.2 percent of total airline revenue (MarketIntelo, 2025).

Furthermore, the airline sector accounts for a severe 46 percent of all online fraudulent transactions across verticals (Sumsub, 2026). The combination of high average order values and the ease of reselling digital travel products creates an attractive target profile for coordinated fraud rings.

Consequently, 64 percent of travelers perceive rates of payments fraud to be actively increasing across the industry, and 35 percent express a lack of trust in travel companies to keep their payment data secure (Outpayce from Amadeus, 2025).

The financial weight of false declines on conversion 

Rizou notes that many travel merchants still rely on generic fraud detection technology built for standard retail. Standard models designed for retail e-commerce often trigger aggressive blocking when faced with multiple passenger names, international IP addresses, and foreign issuer cards in a single booking. The tension between security and frictionless commerce becomes most apparent in the false decline rate. When fraud rules are tuned exclusively toward minimizing chargebacks, they inevitably block legitimate customers. In travel, a rejected transaction rarely results in a second attempt with the same merchant.

A traveler facing a declined card during a complex, multi-leg flight booking will typically abandon the session and execute the purchase with a competitor. Customer acquisition costs in the online travel space are exceptionally high due to aggressive search engine marketing and aggregator competition. Rejecting a legitimate customer at the final stage of the funnel instantly destroys the initial marketing investment and drives revenue directly to a rival platform.

The operational reality demands a precise calculation of dispute costs. The average travel chargeback value sits around $120, but the all-in cost per dispute reaches approximately $450 when factoring in representation labor, lost merchandise, and card network fees (AtlasPerk, 2026).

While avoiding these costs is critical, the revenue destruction caused by overly sensitive parameters frequently exceeds the actual cost of fraud. Customer experience suffers significantly when risk engines fail to contextualize the purchase.

Consumer tolerance for payment friction is exceptionally low, with 74 percent of end clients abandoning bookings entirely if their preferred payment methods or expected seamless flows are interrupted (AtlasPerk, 2026).

As Rizou explains, effective fraud management requires finding the exact balance between preventing fraud and enabling sales. Preventing fraud at all costs proves counterproductive if the rigid parameters turn away genuine business.

Overly strict rules also force transactions into manual review queues, causing fulfillment delays, increasing operational expenditure, and creating friction for genuine buyers waiting for their confirmation emails.

Calibrating risk controls for regional payment behavior

Global travel platforms process payments across overlapping regulatory zones, acquiring banks, and cultural payment preferences. A monolithic approach to fraud prevention cannot accommodate the variance in regional consumer behavior.

Booking patterns that indicate high risk in North America may represent standard consumer practice in Latin America or Southeast Asia. Rizou highlights that even within the same region, no two neighboring countries share identical fraud patterns, payment behaviors, or regulatory landscapes.

For instance, it is common in specific South American markets for a single cardholder to finance travel for an extended family group, generating multiple tickets under different passenger names from a single primary account. Applying static rules across these diverse environments guarantees commercial failure.

European merchants must comply with Strong Customer Authentication mandates, which add friction to the checkout process. While the European Banking Association noted that payment card fraud dropped to €29 in every €1,000 following widespread implementation (Outpayce from Amadeus, 2025), applying such mandates indiscriminately across all global traffic introduces unnecessary friction.

A dynamic approach that limits step-up authentication exclusively to higher-risk transactions allows merchants to remain compliant while protecting conversion. In cross-border scenarios, transaction complexity multiplies. A booking might originate from a device in the United Kingdom, utilize a payment card issued in the United Arab Emirates, and purchase an itinerary entirely within Southeast Asia.

The overlapping geographical data points routinely trip standard risk thresholds unless the evaluation engine utilizes travel-specific logic to recognize the validity of the global movement.

Risk engines must adapt to local issuer responses and alternative payment methods. Travel operators expanding into emerging markets encounter localized digital wallets, delayed settlement processes, and varying levels of security adoption.

A localized, travel-aware fraud strategy accurately parses the regional anomalies, allowing merchants to scale into high-yield, complex markets without absorbing unacceptable chargeback ratios.

Understanding the specific mechanics of local payment instruments allows risk teams to apply the correct friction at the exact right moment, rather than issuing broad declines based on geographic origin alone.

Practical implications for travel operators

The operational reality of managing fraud dictates that travel operators must treat risk analysis as an active commercial function rather than a background IT process. Relying on legacy gateways or basic rulesets limits an online travel agency’s ability to compete on price and availability. Travel organizations operating at scale require automated workflows that separate definitive fraud from high-friction legitimate behavior without human intervention.

Rizou’s tenure at Etraveli Group provides a clear operational blueprint for this transition. To address the unique pressures of the airline and online travel agency ecosystem, Etraveli Group developed an in-house fraud solution tailored explicitly to travel commerce, which evolved into the decision intelligence engine known as Precision.

Built to accurately detect fraud while allowing genuine transactions to proceed without latency, the system enabled the platform to scale confidently into higher-risk regions without sacrificing approval rates or customer experience. Originally developed to address internal risk vulnerabilities, the travel-native engine became a primary driver of the agency’s expansion into some of the most challenging global markets.

By providing a highly competitive prevention setup that adapted to local payment behaviors and minimized false declines, the organization navigated complex risk landscapes while outperforming generic industry benchmarks. The success of the internal deployment prompted the strategic decision to commercialize the intelligence, making the exact same travel-native evaluation models available to external airlines and operators.

The architecture of such a system relies on real-time assessment at the exact moment of booking. Because travel inventory is highly dynamic, with pricing and availability changing by the minute, the risk decision must occur instantly. Introducing latency into the checkout flow leads to session timeouts and lost revenue.

Operators require systems that ingest massive volumes of travel-specific data points, including route histories, ancillary service selections, time-to-departure ratios, and cabin class distributions, to form a precise risk score before the authorization request reaches the acquiring bank.

Fraudsters exhibit different behaviors depending on the proximity to the departure date, meaning a business class ticket booked four hours before departure carries a fundamentally different risk profile than a basic economy ticket booked three months in advance. Standard retail fraud tools cannot ingest or weigh these industry-specific variables accurately.

Shifting from Fraud Reduction to Profit Optimization

The ultimate objective of a mature risk capability is profit optimization. Viewing fraud prevention strictly as a loss mitigation exercise creates a misaligned incentive structure within the organization. If the risk team is measured solely on maintaining the lowest possible chargeback rate, they will logically tighten parameters until genuine sales are suffocated.

Commercial success in the travel sector demands a deliberate balance between accepted risk, conversion maximization, and operational cost control.

A travel-native intelligence engine evaluates transactions based on their overall contribution to the bottom line. It calculates the probability of fraud against the lifetime value of the customer, the current margin on the specific travel product, and the internal cost of manual review.

Travel merchants can directly expand total revenue by approving a significantly higher volume of legitimate transactions, which is achieved by accepting a controlled and highly predictable level of risk. A 99 percent approval rate might introduce slightly more chargebacks than a 95 percent approval rate, but the additional revenue generated by the extra four percentage points of legitimate bookings almost always overshadows the incremental fraud loss.

Such financial alignment transforms the fraud department from a cost center into a strategic revenue enabler. It allows commercial teams to launch aggressive marketing campaigns in historically challenging regions, confident that the risk engine will isolate bad actors without rejecting the influx of new legitimate customers.

As Rizou underscores, effective fraud management is about finding the exact balance between protecting revenue and enabling growth.

The capability to decline with precision, while approving with confidence, defines the modern standard for travel transaction management. The technology serves the broader commercial objective, executing high-volume digital travel sales efficiently, profitably, and securely, ensuring the merchant retains control over its financial performance and its competitive position in the global market.