LOST WHEN IT COMES TO YOUR TRAVEL MERCHANT ACCOUNT?

Looking for Travel Merchant Account Solutions?

The travel industry is categorized as high risk due to the way debit and credit card transactions are processed. When unexpected issues arise that may cause the person not to redeem their ticket, reservations, or the product purchased and a refund is requested, this common factor is what categorizes the travel merchant accounts as high risk.

When there is too much of a lapse in time for the customer to consider canceling their travel or booking plans, the chances of a chargeback for these customers very high. These kinds of situations are what also makes the business subject to needing a high risk merchant account.

Many of the reservations purchased for travel are considered card-not-present. This means that the debit or credit card was given over the phone or used to book with online. Card-Not-Present transactions make it difficult to prevent fraud, which in turn creates the probability of excessive credit card chargebacks.

Businesses that apply for a travel merchant account classify their services of buying tickets and booking travel as a “High-Ticket Size,” meaning that the price tag is usually pretty high. This type of business platform is a huge red flag for acquiring banks. The only thing worse than chargebacks – are higher priced chargebacks. Keep in mind that banks calculate risk based on the “what if” factors – things like: what if there are chargebacks? What if there are refunds?

Did Your Credit Card Processor Shut Down Your Travel Merchant Account?

Someone books a trip through your service. The bill comes to $887, which the bank considers a high ticket size. You send the client an invoice via mail or email. The customer pays this invoice with a debit or credit card, typically online or over the phone, making this payment a card-not-present payment.

Because you are using a travel merchant account, you will get that $887 within 48 hours (often much sooner). However, if the charge made online is disputed by the customer or reported as a fraudulent charge and the customer wins the dispute, the merchant processing company has to refund the customer.

When the bank goes to take the funds from your bank account, if there is not enough funds in the account to cover the refund, the merchant account processing company is then responsible for paying the customer the refunded amount.

Why Does this Matter and How Can PayKings Help with my Travel Merchant Account?

When you apply for a travel merchant account and the underwriters for the acquiring bank and merchant processing company are assessing whether your business is one that has a high likelihood of excessive high ticket size chargebacks – this is what classifies your business as a high-risk merchant. As a merchant in need of a high risk credit card processor, they will have to attain a high risk credit merchant account with a reputable company like ours. Afterall, PayKings are the best in the industry when it comes to high risk merchant accounts.

How Does Being High Risk affect your Travel Merchant Account?

The two most important factors for businesses with a high risk travel merchant account status are:

Underwriting

If your business is placed in the high risk category, you are more than likely going to have a much more difficult underwriting process.  You will be required to come up with tax returns, corporate filing paperwork, several months (sometimes up to a year) of bank statements and processing history.

Fees

You can also expect higher than normal fees. This includes but is not limited to higher fees per transaction, higher fees for monthly statements, and a larger than normal cash reserve to ensure the bank that they are covered in the occurrence of potential chargebacks and or refunds.

Also, keep in mind that the above only applies if a bank decides to approve you… which most will not, and it can be incredibly difficult to find a reliable processing partner. You don’t have to go through the run around of applying with several banks only to get declined – PayKings makes getting approved for a travel merchant account simple. Just fill out our quick and easy form to get started by clicking here.