OTA (online travel industry) has three main sources of income:

Agency mode (Agency)、Wholesale model (Merchant) and advertising model。

Most OTA companies use the agency model as their main profit model。That is, OTA is the supplier (hotel、Airlines)/agents (travel agencies) selling products，And draw a commission based on a certain percentage of sales。This model is more friendly to consumers and businesses，Also promotes the rapid development of the OTA industry。

In the context of fierce competition in the domestic market，Overseas markets have gradually become the target of competition for major OTAs。China’s OTA cross-border platform is represented by Ctrip，Integrated hotel、Air tickets、Attraction tickets、Car rental and other travel products。Recent，Ctrip and Baidu Maps have "officially announced" the launch of overseas taxi services，One-stop integration of mainstream overseas taxi platforms such as Grab，Provide overseas car rentals for overseas users、Pick up and drop off at the airport、Chartered car、Four major taxi-hailing services.As of now，Covered 56 countries around the world，886 cities。

2C transactions in the OTA industry have two major characteristics:

1.  The payment process for OTA transactions is special.

The biggest difference between OTA transactions and ordinary retail e-commerce transactions is，Retail e-commerce is basically a consumer transaction，And OTAs are almost all pre-authorized transactions。Every order generated on the OTA platform，Merchants need to confirm with their suppliers whether they have inventory，So after the customer places an order，OTA merchants often pre-authorize to freeze customer payments，Deduction will be made when the goods are confirmed；If there is no stock after confirmation，The pre-authorized transaction will be revoked。

International credit card acquiring chart of cross-border payment company iPayLinks based on OTA industry

2.  Rejection issue for OTA transactions.

For e-commerce，Chargeback is an unavoidable problem。The chargeback rate of ordinary retail e-commerce is mainly determined by the merchant’s product quality、Operational capabilities、Logistics、Decided by a series of factors such as supply chain and customer unit price。In all chargeback orders，Generally 70% are service chargebacks、30% are fraudulent chargebacks，In other words, most chargeback orders can be improved by improving the merchant's own service quality。

The transactions on the OTA platform are due to the high unit price、Quick cash (tickets、Hotel and other orders are very easy to occur) and other 188bet app download factors，The ratio of fraud chargebacks to service chargebacks is often 7:3 。Among them credit card fraud、Black Ash Production、Fake account、Promotion and cheating are common means of fraudulent transactions on OTA platforms。

Otherwise，Airlines currently on the market、Hotels and other suppliers are increasingly fragmented，Fierce competition among each other，In order to ensure sales，Each supplier often connects with thousands of distributors to ensure order volume。Meanwhile，Each distributor will also correspond to tens of thousands of supplier travel products。Take air tickets as an example，Conservative estimate，An airline distributor (including OTA，There are probably thousands of agents, etc.。In order to reduce costs，Many distributors skip suppliers and directly connect with each other，Resulting in complex and diverse distribution channels crossing。Regardless of size，The series of problems caused by this have caused trouble for many OTA merchants。

Main settlement issues faced by OTAs:

1. Unable to manage cooperative merchants

The informatization level of most distributors is relatively low，Take the hotel as an example，Except for a few big OTAs，Many small and medium-sized distributors do not have mature order settlement management systems。Therefore，How to manage all cooperative merchants，Maintaining the settlement methods of each merchant is already a headache。

2. There are many settlement methods and reconciliation is troublesome

There are different settlement methods between each supplier and distributor，Different settlement cycles，Even if the calculation method is consistent with the period，Different cooperative merchants have different billing models，You can imagine the workload and complexity of reconciliation。

Several settlement methods commonly used by aviation merchants

Take OTA as an example，The prepayment model means that the merchant pays part of the payment in advance，The payment amount of each transaction will be deducted from the advance payment，Until the prepayment amount is exhausted。

The problem with this settlement method is:

1) Each supplier needs to pay an advance payment of hundreds of thousands to millions，Too much financial pressure；

2) High risk，If the supplier runs away，All the advance payment was wasted；

3) Account management trouble，Each supplier manages one pre-deposit account，Account limit management、Update query，At present, it is still mainly offline，Huge workload；

4) Offline management leads to opaque operations、No details、High error rate、Trouble with reconciliation、A series of derivative problems such as high bad debt rate；

5) Exchange rate fluctuates greatly，Uncontrollable income，For example, the Turkish currency plummeted overnight，If it is pre-deposit mode，Will cause huge losses。

In order to deal with these problems，Some third-party service providers on the market have also launched many products and solutions，188bet Online Sports Betting and Casino But no fundamental solution can be obtained from the source。Is it possible to have a set of integrated products in the future to completely liberate funds and labor between suppliers and distributors？

We'll see.

188bet app download *thisWen LaiSource: WeChat public"AirTIT Circle" (ID: AirTIT)，Author: iPayLinks，Original title: "What problems do Chinese OTAs face when going overseas?》.