Travel Merchant Accounts

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Travel Merchant Accounts

The travel and hospitality industry generates over $15 trillion in revenues yearly. Travel is one of the world’s largest industries, accounting for 9% of global GDP. Much of this growth has been facilitated by the widespread use of electronic payments. Accepting payments online from your customers is vital to the success of your business. 

Yet, affordable and reliable travel merchant accounts are not always easy to get.  The main reason is that the travel industry is considered high risk by acquiring banks.

Paynetsecure provides travel merchant accounts to all segments of the industry.  Charters, tour companies, travel agencies, hotels, timeshares, cruise lines, airlines, and hospitality businesses are welcome to apply.


 

Travel Classified as High Risk

All reasons for a high risk merchant classification come back to a single issue.  Chargebacks.  A chargeback occurs when a customer calls their issuing bank to dispute a transaction. 

Chargebacks from travel merchants are a concern to banks and processors for three main reasons:

  • Average sales tickets are high. Tickets, accommodations, tours, and all other costs associated with a trip can add up.  Customers can seek to defray expenses costs by charging back a transaction even though it was authorized, which is known as “friendly fraud.”   
  • Advance purchase. Travel related services are often purchased months in advance. The long period between ordering and the trip may cause customers to cancel when plans change or buyer’s remorse sets in. 
  • Industry. Bankruptcies & other failures within the travel industry caused banks to take big losses from chargebacks. Many banks are still shying away from boarding travel merchants.

 

Domestic & International Merchant Accounts

International merchant accounts are a good solution if you have target markets outside of the US.  

  • Establish accounts with acquiring banks in all the regions in which business is conducted.
  • Save money on processing fees by taking advantage of lower intra-region interchange.
  • Decrease foreign exchange expenses
  • Pay local vendors and workers in local currency
  • Gain access to alternative payment methods popular in many parts of the world

For businesses with only US customers, a domestic merchant account works well.  US acquiring banks will accept travel merchants.  Still, many US travel merchants combine domestic travel merchant accounts with offshore processing to:

  • Mitigate risk by diversifying location of banks
  • Obtain higher processing volumes. Offshore accounts often have no caps on processing.
  • Take advantage of business benefits offered by some offshore jurisdictions

 

How to Apply for a Travel Merchant Account

To qualify for a travel merchant account or travel agency merchant account, businesses must have payment processing history showing a minimum of $100,000 per month.  No startups are accepted. 

A dedicated account manager will help you through the account process.  You will be asked to submit an application along with supporting documents.  Information requested includes processing & bank statements, company history, and identification for the signer on the account. 

Allow 7-10 business days for approval of domestic travel merchant account.  International travel merchant accounts take 14-21 business days for approval from the time the completed application file is received.


 

Tips on Applying for Travel Merchant Accounts

Here are some of the questions underwriters often ask merchants.  Providing this information in your application package helps speed account approval.

What is your action plan to prevent fraud and chargebacks? 

If your processing statements show low chargebacks, that’s great.  Provide the information on how you are keeping fraud & chargebacks under control. If your chargebacks are edging up, include the reasons.  Be pro-active in identifying weaknesses and how you are prepared to correct them.

Do you have other strategies to protect against fraud & chargebacks? 

For instance, some travel merchants take some smaller deposit months in advance of the travel date and then charge the remainder closer to the travel date. Best practice is to send customers an email or text a few days before the charge is placed on the card so the transaction will be fresh in their minds.  

Do you have a financial failure insurance plan?    

A financial failure insurance plan is not required for account approval.  However, if you do have one, it’s helpful to supply the details. 

What industry organizations are you affiliated with?

There is no need to belong to any for account approval.  Still, if you do belong, it’s good supporting information. 

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Payments power profits. PaynetSecure specializes in high volume & high risk merchant services. Over the past 18 years, the company has successfully provided proven, reliable & secure payments processing to thousands of US & international businesses. Securely accept cards payments. Add alternative payment methods that drive more orders and accelerate sales. Access specialized processing solutions designed to increase your profits, while reducing risk. Discover top notch service, dedicated support, and devotion to your complete satisfaction. Contact us anytime for a free, no-obligation consultation. Your complete satisfaction is our goal. 

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