Iran Conflict Disrupts Cross-Border Travel Card Payments, Travel to UAE and Saudi Arabia Declines

Global Cross-Border Payments: Impact of Worsening Iran War

Key Takeaways:

• 20-30% dip in global travel volumes linked to cross-border payments due to the worsening Iran war
• 80% drop in flight bookings to the UAE and 33% decline in bookings to Saudi Arabia
• Tripling of cancellations for Saudi Arabia bookings

Impact on Travel and Payments Ecosystem:

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The worsening Iran war, which has expanded to the Gulf region, is causing ripples in India's travel and payments ecosystem. Fintech firms, including Razorpay, are experiencing a slowdown in cross-border transactions as Indians reconsider visiting the region and beyond. The main reason for the disruption is the critical role of West Asia as a transit hub for international travel from India.

Cross-Border Payments Trends:

• Razorpay reports a noticeable dip in global travel volumes, with a 20-30% impact on global travel volumes
• Scapia, a travel-focused fintech, has seen a sharp decline in bookings, with stay bookings for the UAE nearly halving in March compared to February, and flight bookings dropping by around 80%
• Bookings for Saudi Arabia are about a third month-on-month, with cancellations rising nearly threefold
• Destinations across Southeast Asia, such as Thailand, Vietnam, and Indonesia, are seeing increased interest as travellers look for alternatives until the situation stabilises

Resilience of Cross-Border Payments Ecosystem:

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Despite the slowdown in travel-related transactions linked to West Asia routes, the overall impact on cross-border payment volumes remains minimal, according to industry executives. As travellers shift to alternative destinations, the impact on overall payment volumes remains limited, for now.