Travel is among the world’s most robust industries, accounting for 10.3% of global GDP and employing more than 300 million people world-wide. The global growth of the travel industry continues to outpace the world economy as manytravellers have the money, time, and desire to experience the world.
The travel industry has benefited by the widespread use of electronic payments, providing travellers a smoothly efficient way to pay is the cornerstone of your travel business success. A travel merchant accounts makes it simple for travellers to pay you over the phone ,online, by mail or at a retail store location.
Reliable, stilland affordable travel merchant accounts are not always easy to get. The key reason is that the travel industry is considered high risk by acquiring banks. There are so many banks both in the US & internationally that are keenly interested in providing payment processing to travel merchants.
Why do merchant account service providers find travel industry a high-risk industry?
This market deals with more of pre-bookings. A lot of customers find it convenient to place their booking beforehand to be on a safer side and also save their money. It is a known fact as well, the earlier you are, the better you get.
The reasons that change the notion of this industry to a high-risk industry in terms of online payment gateway are:
- Payments are mostly done way earlier than the delivery of services
- People demand their money back due to change in their schedule and lack of planning
- There is always a chance of introduction to better deals due to dynamic changes in prices
- Cancellation of trips due to personal, business or environment reasons are prominent
- Fraud Chargeback cases
- If company is unable to pay for chargeback then bank and merchant are responsible to give back customer’s money
Tips on Applying for Travel Merchant Accounts :
Here are some of the questions underwriters often ask travel merchants. Giving this information in your application package helps speed account approval.
What is your action plan to prevent fraud and chargebacks?
If your processing statements reflect low chargebacks, that’s great. Provide details on how you keep fraud & chargebacks under control. If your chargebacks are edging up, simply explain the reasons. Being pro-active in identifying issues and how you plan to correct them shows that you are knowledgeable & capable of managing your payment processing account.
What are your 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. Other travel merchants send customers atext or an email or a short time before the charge is placed on the card so the payment will be fresh in their minds.
Do you have a financial failure insurance plan?
A financial failure insurance plan is necessarily 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 particular organization for account approval. Still, if you do belong, it’s good supporting documentation.
How to choose a Payment Gateway for your Travel Business
Payment Gateway is a service that allows a website to accept debit or credit card payments real time. It acts as a link between you and your merchant account for securely processing the payments. Payment Gateway and Merchant Account are oft confused terms. A merchant account holds the funds in the bank account before depositing them into your actual bank account; the payment gateway simply approves or disproves a transaction. Your site will send the card related information to the payment Gateway. If all the information matches with that on the file of credit card Company, the transaction is approved. After that the payment gateway will transfer the money from your customer’s credit card to your merchant account.Here are some of the criteria you should keep in mind before selecting a Payment Gateway.
It always a good idea to first check the hosting criteria at your end. Whether your website hosting service is geared up and ready to integrate the payment Gateway or not? Also it’s important that a payment gateway solution should be easy to integrate with the website’s shopping cart software as well.
It is important that you decide the budget which you would like to spend on acquiring a Payment Gateway. It is advisable to know the fee structure of the identified Payment Gateways before moving forward.
Some of the Payment Gateway Providers ask for a fee per transaction and others may offer a monthly fee for a fixed number of transactions in a month also processing fee. In case your online payments volume is relatively low, then it is good to avoid monthly fees and a high setup cost. But at the same time you have to keep in the mind about your future needs of your business.
Always let’s keep in mind when you want it to be operational as it may take up to a month for setting up a merchant account and payment gateway. If a payment gateway provider is willing to sign up without a merchant account then you can started immediately. Getting a merchant account is really a long drawn process despite the help offered by the payment gateway provider. More so if you are a small business doing this for the first time.
The biggest concern while finalizing the payment Gateway should be security. Every merchant should opt for a secured payment gateway as it goes a long way in establishing customer’s confidence and building reputation for your business. You need to understand and choose the fraud detection and prevention mechanisms. They can be built into the gateway itself to avoid charge-backs and other issues. All this helps in avoiding bogus purchases
Types of cards accepted
Most of the Gateways accept VISA, MasterCard and American Express. If in case you have transactions from international markets than you need to check if your gateway supports local credit card types of those markets.
We all know the importance of the customer support provided by the Payment Gateway Provider. In this era of 24 hour work day, it is simply not possible to ignore this aspect. There needs to be 24/7 customer service.