Travelport enjoyed a stronger-than-expected first quarter, thanks to a strong performance in its core business as a middleman that helps agencies book travel for customers.

But the travel technology company also processes payments for agencies through a majority-owned subsidiary, eNett, the fastest-growing section of Travelport’s business.

In the first quarter of 2017, eNett saw net revenue growth of 22 percent, to $41 million.

While those numbers are small, they are more impressive when considered against Travelport’s net income for the quarter, which was $55 million. The growth — with net revenue up 64 percent in 2016 — is notably organic, meaning Travelport hasn’t bought anything that would supplement the numbers.

The growth is also steady: Travelport forecasts that the commercial payments business will grow its net revenue by at least 20 percent this year. The company told Skift on Tuesday that it believes this growth will be driven by adoption in North America thanks to its introduction of Mexican peso-based transactions and conversions.

The revenue rise was primarily due to an increase in the volume of payments settled with existing customers and new customer wins, the company says.

In an interview with Skift earlier this month, Travelport chief executive Gordon Wilson said the company was doubling down on its payments business.

Aiming to Cash in an Opportunity

Simplifying payments is the main eNett pitch to agencies. Today agencies face demands from different companies to pay in various ways. Low-cost carriers often want credit card and cash advance payments, hotels often want electronic funds transfers, and major online travel agencies often prefer payments via APIs (or application programming interfaces).

Adding to the complexity is that back-end accounts payable systems don’t talk to all booking platforms, and cross-border payments often involve currency fluctuations.

Due to the complexity, agencies still process about 40 percent of their payments manually. Many complain about fraud, which is difficult to catch quickly given the manual process.

Into this mess, eNett competes with other companies, such as Wex and Worldpay, in a unified way of paying different companies differently via virtual accounts supported by MasterCard. (Any company that can process Mastercard payments can accept eNett’s virtual cards as part of a long-term partnership between the companies.)

Wilson tells Skift that corporate agencies particularly like how eNett helps agencies handle hotel bookings.

A case in point: Under the “merchant model,” a company like Expedia negotiates with hotels for wholesale room rates, which it then markets at a higher retail rate.

After a customer pays the online travel agency $150 for a room, the online travel agency might submit $100 of that amount to the hotel.

Traditionally those merchant model transactions were done via wire transfer, a laboriously manual process that risks trouble if a hotel goes bust and risks a currency exchange markup by every bank involved in the process if it is a cross-border transaction.

By using eNett, agencies can automate the process.

Solving such problems gives Wilson hope that eNett can grow and someday be the largest revenue driver at Travelport.

The company has resisted processing business-to-business payments outside of its specialty in the travel sector. Wilson says that being a big fish in a relatively smaller pond seems like a better path to success, as it can use its existing relationships within the travel sector to promote the eNett business.

“But that said, at some point, inevitably we’ll branch out into areas other than travel,” says Wilson. “But there are no immediate plans.”

Photo Credit: The bosses of eNett, a Travelport-owned company, are sitting pretty these days thanks to solid revenue growth Visual Hunt