Buy Now, Pay Later (BNPL) is no longer an alternative payment option, but a mainstream financing model, particularly in high-value sectors such as travel. As its adoption accelerates, exposure to fraud and disputes is rising just as quickly. BNPL transactions are among the fastest-growing sources of payment disputes and BNPL fraud in travel payments.
As BNPL becomes embedded at scale, merchants and providers must recognise that convenience introduces new and distinct forms of risk. Rising BNPL fraud makes BNPL risk management a strategic priority rather than an operational afterthought. This article explores why BNPL is uniquely vulnerable, how BNPL fraud in travel payments is evolving, and the practical controls leaders can deploy to protect revenue and customer trust without compromising customer experience.
Why BNPL fraud is accelerating, and how it manifests
The rapid growth of BNPL has fundamentally reshaped the fraud landscape. Recent industry surveys indicate that around 37% of consumers have used BNPL, with global adoption expected to reach hundreds of millions of users in the coming years. This growth has significantly expanded the attack surface for fraud.
Fraudsters take advantage of BNPL’s low-friction onboarding, lighter upfront credit checks, and deferred settlement windows. Common fraud tactics include account takeover, synthetic identity creation, account takeovers, refund abuse, and first-party or “friendly” fraud. Because financial liability is often shifted downstream to merchants or third-party providers, unchecked BNPL fraud can quickly erode margins and weaken customer trust.
Why are travel payments a high-exposure use case?
The risks of BNPL fraud are magnified in the travel sector. Travel bookings are typically higher in value and fulfilled long after the transaction is authorised, giving fraudsters extended time to exploit verification gaps or dispute mechanisms. BNPL is increasingly used to pay for flights, accommodation, and experiences, placing travel merchants squarely in the fraud spotlight.
In this environment, even relatively low fraud rates can translate into significant financial losses and operational complexity across refunds, chargebacks, and service fulfilment. As a result, travel operators require fraud controls specifically designed for long lead times, multi-party settlement flows, and complex cancellation and refund rules.
BNPL risk management: a layered, business-first approach
Addressing BNPL fraud effectively requires a layered risk management strategy that integrates prevention, detection, and operational readiness. No single control is sufficient on its own. Instead, organisations need to combine identity intelligence, behavioural analytics, and adaptive decisioning within a coordinated framework.
This includes enriching onboarding with device and identity signals, monitoring transactions in real time for behavioural anomalies, and using machine learning models to distinguish between legitimate and high-risk activity. Collaboration and data sharing with BNPL providers and payment partners further strengthen detection, while clear operational playbooks for disputes, refunds, and fulfilment help close common fraud windows.
Implementing these layers reduces false positives while blocking the most common attack vectors, preserving conversion rates while protecting margins.
Detection and prevention tactics specific to travel payments
While BNPL risk controls may be broadly applicable across industries, travel payments introduce unique timing, value, and fulfilment dynamics that demand more targeted detection and prevention measures. Travel businesses must therefore extend controls across the entire booking lifecycle.
Effective practices include -
- Verifying customer identity at booking and at key pre-travel checkpoints such as ticket issuance or check-in.
- Monitoring for unusual patterns, such as rapid multi-bookings or atypical itineraries that deviate from a customer’s historical behaviour
These measures are designed to intercept fraud before service fulfilment, when losses are most costly and recovery options are limited. This approach is increasingly important as market forecasts suggest global BNPL user numbers could exceed 900 million by 2027, significantly increasing transaction volumes and risk exposure.
From fraud control to commercial advantage
BNPL risk management increasingly shapes commercial decision-making, not just fraud outcomes. Travel businesses with mature controls can confidently approve higher-value bookings, expand flexible payment options, and serve new customer segments without disproportionately increasing risk.
Rather than relying on blanket restrictions, risk-aware decisioning enables more precise approvals that protect revenue while sustaining conversion.
Strong BNPL governance also improves a merchant’s position within the payments ecosystem. Demonstrable control over disputes and loss exposure strengthens relationships with BNPL providers, supports favourable commercial terms, and improves cash-flow predictability.
Merchants investing in advanced fraud analytics achieve lower dispute rates, reduced false positives, and stronger payment performance, reinforcing the link between effective risk management and commercial outcomes.
How can Infosys BPM help travel businesses secure BNPL payments?
Infosys BPM helps travel and hospitality enterprises strengthen BNPL fraud prevention by combining industry expertise, analytics-driven insights, and scalable operations. By integrating fraud detection, trust and safety services, and payment risk management across booking, payment, and fulfilment workflows, Infosys BPM enables early identification of suspicious BNPL activity, faster dispute resolution, and closer coordination with ecosystem partners. This approach helps travel businesses protect revenue and customer trust while confidently offering flexible payment options at scale.
Frequently asked questions
- Why is Buy Now, Pay Later (BNPL) fraud accelerating in travel payments?
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What are the most common types of BNPL fraud targeting travel merchants?
- How can travel businesses prevent BNPL fraud without hurting conversions?
- Why is travel a particularly high-risk sector for BNPL disputes and fraud?
- How does strong BNPL risk management create commercial advantages for merchants?
BNPL’s rapid adoption expected to reach hundreds of millions of users creates a larger attack surface with low-friction onboarding, deferred settlement, and lighter credit checks. Travel bookings amplify exposure due to high values, long fulfilment delays, and complex refund/cancellation rules that fraudsters exploit.
Common tactics include account takeover, synthetic identities, refund abuse, and first-party “friendly” fraud where legitimate users dispute post-fulfilment. Fraudsters also leverage rapid multi-bookings or atypical itineraries to maximise losses before detection or service delivery.
Layered controls like identity verification at booking and pre-fulfilment checkpoints, real-time behavioural monitoring, and machine learning for anomaly detection block high-risk activity while minimising false positives. Coordinating with BNPL providers on data sharing strengthens detection across the ecosystem.
Travel involves high-value, non-immediate fulfilment transactions that give fraudsters time to exploit verification gaps or initiate chargebacks after enjoying services like flights or hotels. Multi-party settlements and dynamic pricing further complicate fraud prevention without targeted controls.
Mature controls enable confident expansion of flexible payments, higher approval rates for legitimate bookings, and better terms with providers through lower dispute rates. Merchants gain revenue protection, improved cash flow, and the ability to serve new segments without disproportionate fraud losses.
