travel merchant account
16 Jun

By ipaytotal

Category: High Risk Merchant Accounts, Payment Gateway, travel merchant account

Why is a merchant account for Travel Industry considered high risk ? Comments Off

Why is a merchant account for Travel Industry considered high risk ?

What is a
Travel Industry Merchant Account?

ravel Industries can accept credit cards online, or over the phone. Regardless of the payment method chosen, securing a merchant account as a travel industry merchant means locating a credit card processor that can explicitly support your business type.

It won’t do you any good to manipulate with the details to try to get a Travel Industry Merchant account with a processor that doesn’t support travel businesses. At some point, the processor will catch on and shut down your account. Choose a processor who accepts TRAVEL INDUSTRY  merchant as one of its verticals, from the start.

The concept of travel is about as timeless as humanity is old. It has always existed. Needless to say, with the growth of civilizations, the concept of travel became interwoven with society and the economy at large. The word travel, in terms of the industry, has developed into an extremely broad and complex one. The network of businesses, agencies, and services that are associated with the travel industry are virtually endless. If you were to ask the average person what the travel industry consists of to them, you would likely receive answers like a travel agent, cruise line and resort. These answers are completely correct, but only the tip of the iceberg. The support industries that make traveling possible can boil down to almost everything in some way or another. Bus and plane industries move travelers, hotels host them, restaurants feed them and stores support their purchasing needs. The industry supports an absolutely massive portion of the world economy.   Your travel business needs to stay competitive. Utilizing the best tools in the industry is how you do that.

Are you tired of dealing with banks that say “No” to your travel business? Work with a company that says “Yes” and appreciates hard-working small business just trying to deliver great products and services to their clients. Specializing in helping companies like yours take credit cards from your customers.   Our goal is to help manage every facet of your travel merchant account, and payment processing needs so that you don’t ever have to worry about it. Because our experienced expert team is taking care of your business like it was our own. Imagine having the freedom to purely focus on the most important aspects of your business, and not being weighed down by your E-Commerce trivialities. This is the peace of mind we provide.

When most people think of “high risk” credit card processing, they think of gambling, firearms, tobacco, and similar industries. But travel agencies also typically fall under “high risk.”.   One reason for that is the higher-than-average chargeback rates. Not to worry. Even as a high-risk business, it’s still possible to secure a merchant account to accept credit cards. Here’s what you need to know as an agency, tour operator, cruise business, or other travel company.   Primarily, chargebacks. Travel is a business where your customers pay in advance for a service that happens in the future. (Sometimes well into the future – months down the road.).   Unfortunately, life gets in the way, and a customer may decide to cancel a trip. But you’ve already put work into booking the trip and setting an itinerary; that’s why you require deposits or impose a no-refunds policy. Disgruntled customers will often skirt that, filing a chargeback with their card company.   Travel Agent Merchant Accounts. Travel agencies can accept credit cards online, in person, or over the phone. You can also combine methods if you’d like. Customers could pay a deposit in person and then pay their final balance online prior to their trip.   Regardless of the payment method, you choose, securing a merchant account as a travel agent means locating a credit card processor that can explicitly support your business type. It won’t do you any good to fudge the details to try to get an account with a processor that doesn’t support travel businesses. At some point, the processor will catch on and shut down your account. Save yourself the headaches and choose a travel-friendly merchant processor from the start.

The accompanying list incorporates only a couple of the numerous organizations in the travel industry iPayToTal.com gives merchant account services to:

  • Independent travel agents
  • Travel agencies
  • Tour operators
  • Online travel reservation websites
  • Timeshare Resellers
  • Cruise lines
  • Transportation
  • Charters
  • Ticket sales
  • Lodging

Who Needs Travel Merchant Accounts:


he need for travel merchant accounts have grown tremendously in the last few years. As the cost of air travel has gone down,making  travel affordable to every individual and with the boom of internet, the travel industry has exploded recently. According to reports, Travel and tourism is one of the world’s fastest-growing sectors, with reservations closing to $1.6 trillion in 2017.Travel Industry is positively one of the most lucrative industries on the planet.With the future growth projections blowing away the current market statistics and the expanding world economy’s growth trajectories, the travel industry will continue to rise sky height.

The concept of travel is as old a humanity exists. It has always existed.Needless to say, with the growth of civilizations, the concept of travel became interlinked with society and the economy at large. The word travel, in terms of the industry, has developed into an extremely broad and complex one. The network of businesses, agencies and services that are associated with the travel industry are almost endless. If we ask any individual as to what the travel industry consists of, we will receive answers like travel agent, cruise line and resort. These answers are true, but it’s only the tip of the iceberg.

Your travel industry needs to stay competitive and updated as per the market requirements. Utilizing the best tools in the industry is how you do that. A travel merchant account from High Risk Merchant Account, is what you need. At Ipaytotal our specialists will advise you based their experience they have earned in this industry. This will ensure your travel business performs at its best in arguably one of the most competitive markets in the world.

When opening a travel industry merchant account, you will need to be aware of the hurdles that you will inevitably face. One of the primary concern for your travel industry merchant processor will be chargebacks. Managing and minimizing your chargebacks are the surest way to keep your travel industry merchant account in a healthy state. Chargebacks occur at a higher rate in this industry because of the likeliness that the purchase is being made far before the service or product is being rendered. This time span between the two events presents the potential of changes and cancellations being made. If these changes are not managed efficiently, they can negatively impact your travel industry merchant account.

Your mission is to provide the best travel experience for your clients, our mission is to help you accomplish that mission in the most prolific and effective way.

What makes Travel Industry Merchant Account High Risk?


his is a question asked frequently by our merchants. Primarily the answer to this is , chargebacks. Travel Industry is a business where customers pay in advance for a service that happens in the future. (Sometimes months ahead down the road.)

The cost engaged with flights, vacations, and excursions make most banks extremely anxious. High-ticket value cancellations and the industry’s notoriety of very large volumes of chargebacks likewise make it hard to convince financial institutions to work with these travel industry merchants. (A chargeback happens when credit card providers request that your business refund the passing of a fraudulent transaction.) These are only a few of the most widely recognized reasons why travel industry merchant accounts are denied.

In most cases a travel agent takes payment as a 3rd party. A travel agent might charge a client for a hotel stay, travel package, cruise, airline ticket and so forth. Any change in these tickets, that’s sometimes uncontrollable by the merchant, is creating the merchant liable to get a chargeback. Today, many travel agency merchants don’t charge airline tickets, resorts along with other travel charges on their very own merchant accounts, but instead, control it directly throughout the airline or travel supplier. This procedure is well respected by many payment processors, but others remain behind with a conservative approach and attempt to avoid travel agency merchant accounts all together.

Large transactions which exceed the average sale amount for the merchant account also trigger security concerns. Travel Industry Merchants who do not inform their Processor of large transactions prior to charging the credit cards can trigger security concerns and cause funding delays and reserve holds. Educating and clearly communicating with the merchant on how to handle large tickets, volume spikes, and group bookings, prevents reserves, funding delays and/or other merchant account issues.

Another concern from the underwriters for Travel Industry Merchant Account is the delayed delivery time frame. Delayed Delivery refers to the amount of time between accepting a credit card payment (whether a deposit or full purchase) and the time the cardholder travels. The client’s credit card is billed and the travel agent is paid, however, the trip the travel agent was paid for doesn’t generally take place for 2 to 3 months. This leaves a lot of time for things to change, and should the client not travel for some reason, the first thing they do if the travel agent does not issue a refund, claims a chargeback.

Travel merchant accounts and the credit card processing capabilities they provide make it possible to realize the potential of your businesses. However, if you don’t already know, getting approved for a high risk travel merchant account can be incredibly difficult if attempted without considering the many requirements that merchant providers are implementing in place because of excess fraud and defaults of companies in the industry. Note that just because a company can support high risk doesn’t mean they’ll offer merchant accounts to every high-risk business. However, it does dramatically ease the process of securing a merchant account as a high-risk company.   Once you’ve located the company or companies you’re interested in, you can request quotes and compare costs for your merchant account for travel business to find the right solution for your needs. When you’re ready to actually apply for an account with a company, you’ll need to provide various documents. These include bank or financial statements, prior processing statements (if you’re already processing), ID, etc.   Remember to disclose the nature of your business upfront. You don’t want to waste your time talking to a processor only to later learn that they cannot support travel businesses.

Travel agency merchant accounts can be tough to get strictly due to laziness on the bank’s part and the typically fickle nature of travel.   Most travelers make plans far in advance, leaving lots of time to re-think one aspect and another. With all this time to ruminate, travelers tend to cancel their purchases at a far higher rate than in most other industries. When’s the last time you canceled picking up your clothes from the dry cleaner or your darling dog from the veterinarian?   To maintain their reputations and client base, travel agencies then cancel with the hotels, cruise ships, etc., creating “chargebacks.”. Beyond the higher rate of chargebacks, travel agencies also must deal with international clients AND vendors. Travel merchants that need higher processing volumes can request new caps in as few as three months. At that time, they must prove that they pay their bills, have low chargeback ratios, and have some savings.   Chargeback soar in the travel industry.   Merchants in the travel industry are hit with so many chargebacks for a number of different reasons, including high average ticket prices. Most services related to travel often cost at least a few hundred dollars.   Since most customers pre-pay for tickets, tours, and other arrangements before they go on trips or use services, travel merchants are considered higher risk. Finally, many travel businesses end up failing due to problems in travel agency credit card processing. When businesses shut down suddenly, they don’t refund the cost for services and tickets that were pre-paid by customers.

The risk is determined based on the potential financial loss to a credit card processor or its sponsor bank. Chargebacks that don’t get reimbursed by a merchant are primarily what drive risk. Any unpaid chargebacks, which occur when customers dispute credit card charges, become the responsibility of processors or their sponsor banks.   Additionally, credit card processors may be subject to thousands of dollars in financial penalties for each merchant account when high-risk merchants maintain excessive chargeback ratios. Whenever a business exceeds a 2% chargeback ratio, credit card companies can find the processor that provided the travel merchant account.   When the ratios remain high, processors have no choice but to terminate their high-risk merchant accounts. To avoiding put their accounts in jeopardy, merchants must work to keep their transactions volumes high and do whatever possible to avoid chargebacks.   

Why is so much information required for a travel industry merchant account?


ue to the higher risk associated with the merchant account for travel industry, more due diligence is required during the onboarding process. This means underwriters of merchant account for travel industry need to review a range of documents to assure the business is compliant, financially sound, and a good credit risk. iPayTotal is unique because we underwrite merchants inhouse before we submit your applications to the bank. Because our team of underwriters is experienced in high-risk, your business is presented to the bank with all required documents for a merchant account for travel and full disclosure, to engender trust and stability.

Presenting your business in the best possible light from point of the first contact is important because merchant accounts are essentially a line of credit from a processor. Because high-risk merchants have higher chargeback ratios and regulatory exposure, financial institutions are concerned they may violate card brand rules, laws and regulations. Complaints to the FDA and the FTC against a merchant create liability not only for merchants but can also hold processors accountable under Know Your Customer (KYC) regulations.

Once a high-risk travel industry merchant account is approved, payment processors set monthly processing limits,for the first three-to-six-months. This gives processors time to develop a customer risk profile by evaluating payment flows, average ticket sizes, processing levels and chargeback ratios.

Maintaining a low chargeback ratio is key to maintaining a healthy merchant account. When chargebacks exceed card brand maximums, your merchant account is at risk of being shut down. If a merchant category has consistently excessive chargebacks, banks will sometimes shut down an entire vertical industry. For this reason, it is critical for high risk verticals to self-regulate and work collaboratively to establish industry best practices.

Many credit card processing companies do not want to take risk of merchant account for the travel industry and deny services to this industry mostly due to credit issues, bankruptcy or on moral grounds due to legal implications. Considering the apprehensions of risk related industry there are several high-risk merchant account service providers which provide merchant account services with normal rates. Just because you are a startup business does not alone classify for risk. It is an uphill task to get a merchant account for new businesses as they do not have an established credit card transforming history, large bank balances, in long time in the business which is lacking for a new business. It is best to have a good business plan, copies of supplier contracts, invoices, sales and quality assurance projects reports which give a legitimate and real hold about the new business.

We at iPayTotal are willing to help and promote this booming industry. Our extended family of travel service provider merchants, with vastly different models and product sets, are equally committed to optimal results, performance metrics, and profitability. While products and services vary, all travel industry clients want affordable and easy high-risk payment card processing, which is our specialty.

Features Of A Travel Merchant Account

Travel Merchant account is considered as a high risk business, owing to the potential risk factors involved such as high volume sales, potential chargeback, refunds etc. At Ipaytotal, we have installed advanced fraud protection systems on our secure servers so that chargeback claims are minimized.

Additional features of our high risk credit card processing services for our travel merchant account includes:

  • Boost in Sales – Once a Travel merchant starts accepting credit cards online, with our travel merchant account, their sales tend to increase many fold.
  • Real-time Processing – Our travel merchant accounts allow real-time internet facilities to accept credit card payments online
  • Cost Effective Solutions – With our travel merchant accounts business owners gain confidence to commence online credit card processing
  • Secure Servers – Ipaytotal offers secure servers so that our travel merchant account holders feel more secure when buying and selling products online
  • 24 Hours Technical Support – We provide a 24/ 7 technical support and customer service facility for our Travel merchant account holders.
  • Fraud Protection – Travel merchant account holders are protected against credit card fraud. Our online fraud protection helps minimize the impacts of fraud on your business
  • Payment Gateway and Virtual Terminal – Travel merchant account holders are now able to accept all kinds of electronic payment through our secure payment gateway and virtual terminal
  • Credit Card Processing Tools – Ipaytotal  also offers tools that can help in online credit card processing
  • Expand your Business – Online credit card processing allows our Travel merchant Account holders to accept payments from around the globe
  • Risk Management – At Ipaytotal we provide you with the best risk management techniques for your travel merchant account, especially when offering online credit card processing services

Our Approach

We, at iPayTotal , assess each travel industry merchants individually, we study your method of doing business so we can board your travel industry merchant account with the acquirer that would be most suited and beneficial for your travel business.

This is how we will be able to give a reliable processing solution for your travel industry


Apply Now

Get access to fraud and chargeback teams who specialize in supporting credit card processing for online travel agencies, travel marketplaces, hotel chains, car rental companies, and more. Whether you are a travel agency or you offer timeshares, we have the merchant account you can depend upon.   Let us locate the best merchant account for your travel or timeshare business.   We provide merchant accounts for travel, timeshare, and tour related companies.   We provide processing services for advance sales. One of the largest travel industry payment providers, iPayTotal team of industry experts brings extensive integration, PCI compliance, EMV readiness, and electronic payment knowledge, and understands the challenges faced by travel providers.

Take payments, manage transactions and pay suppliers with one simple service.   Inspire shopper confidence and increase bookings.   Accept payments across multiple distribution channels and manage incoming funds and supplier payments with our network of global bank accounts.iPayTotal is determined to provide all the advantages that low-risk businesses take for granted in their merchant accounts. Travel agency owners work just as hard and provide just as many great products as tailors, dry cleaners and salons, after all.   When you apply for a merchant account with iPayTotal, you’ll experience:   Easy application and fast approval – take credit, debit, prepaid and gift card payments within days.   Competitive fees and rates – keep your business expenses low.

Get pre-approved travel merchant account

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