Travel & Tour Operators

Merchant Account for TRAVEL AGENCY SERVICES (Travel Clubs, Hotel Booking, Travel Memberships, Travel brokers, etc)

Travel agencies make it easy for people to plan their travel. To make the process simpler they incorporate multiple modes of payment including the card, not present online transactions. For having such a flexible payment system these travel agencies should have a merchant account to back them up. The big question is – how easy is it to open a merchant account for a business in the travel industry?

Dealing with online merchants and travel agents

The travel industry is a broad one including local travel brokers who function out of a small office and large travel companies that have a strong online presence. There are companies that only handle hotel bookings, those that offer travel memberships and the ones that take care of flight bookings. If you look at the money that people spend on all these bookings it reaches the travel business through various channels. When online payments are made the business should have a secure payment gateway that makes the transactions safe. This secures the finances for the customers and the businesses as well. There are also many bookings and money transfers made through iPhone/Droid Mobile Apps. There are many banks that might not deal with merchant accounts for a business that operates online. This is because of the history of online frauds.

Other factors that might lead to a travel business’s merchant account request to be denied

The notoriety of the online travel business frauds has created a burden on the travel industry on the whole. The problem might be due to the scam agencies or even due to troublesome customers. No matter where the problem occurs there come large chargebacks that would then have to be taken up by the merchant account provider.

Travel bookings are sometimes made several months in advance. When the customer then changes his mind and cancels the trip the travel company would have to initiate a refund. These are huge amounts in most cases. In most cases, the travel company would have spent the money paid by the customer on various bookings. So the refund process comes with a loss that should be taken care of by the merchant account provider. Such risks attached to dealing with a travel business’ merchant account discourages several banks and other credit card processors to reject the travel company’s application. In some cases, there are credit card companies that do take up such accounts without a thorough background check. They might charge exorbitant fees for the high-risk merchant account. When the credit card processor has to handle a large chargeback, it might just shut down the account. This is done to avoid the accompanying losses. The travel company’s funds might be frozen as well. To avoid all such problems and to be able to enjoy a smooth and convenient merchant account service high-risk merchant account providers are required.

What can a high-risk merchant account provider offer?

Besides offering a hassle-free application process the high-risk merchant account provider can offer the following benefits:

  • There would be no application fees to be paid

  • The travel business can easily complete the process with the support from the friendly customer care team

  • There are no setup fees to worry about

  • An e-commerce website operated a business or a business with a physical store, would all be treated the same way.

  • The high-risk merchant account providers are flexible and are ready to work with new businesses that have no credit background.

  • Payments can be accepted through Visa/Mastercard/Discover/Amex and even mobile wallets and other digital payment modes.

  • These accounts also allow ACH Processing/Check Processing and check drafting features.

On the whole, no matter how the payment is made, the payment processing can be handled through a virtual terminal with or without signature authentication. The travel business would benefit from the multiple payment modes as it would attract a bigger pool of customers. These features are delivered by the high-risk merchant provider while also easily managing the chargebacks mainly because of the support from multiple underwriting banks. The high-risk merchants learn from each of the clients they deal with in the high-risk category. So they are competent in handling all the tricky instances that high-risk merchant accounts might bring about.

Choosing between overseas and domestic accounts

When a travel business does find a credible merchant account provider there is one other critical decision to make. There are offshore merchant accounts and there are domestic ones. Both of these have their benefits depending on the structure of the business and the preferences of the business owner.

Domestic accounts are very straightforward. The application process takes very little work and time as well. Domestic merchant accounts are therefore simpler than an offshore merchant account. For small businesses with a tight budget set aside for merchant account domestic accounts are cheaper. When the account is a domestic one it also allows easy monitoring of the account.

Offshore merchant accounts are mainly chosen by several high-risk businesses. A business that is pushed to the high-risk category in one country might be considered a low risk one in another. There are some businesses that therefore choose an offshore account in a country where the business is not high risk. The tax terms might also be milder in other countries which can then make up for the larger fees paid for offshore accounts. With an offshore merchant account dealing with international transactions becomes easy. Also, payments made in multiple currencies can be accepted without any problem. All such benefits made offshore accounts attractive for businesses big and small.

The choice here would depend on the budget that the business has allocated for the merchant account fees. Also, the complexity of paperwork and the processing for each of these account varies based on where the account is located. Accumulating all these factors a decision can be made. If the business chooses a merchant provider who deals with both offshore and domestic accounts it provides the opportunity to expand whenever required.



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