Merchant Account for Vacation Clubs, Hotel Booking, Memberships, Brokers

Opening a merchant account is one of the biggest milestones for any business today. Whether the business operates online or whether there is a brick and mortar store, a merchant account is essential. To be able to handle transactions of all sizes and to be able to get instant completion of order payments merchant accounts can be useful. But the process of opening a merchant account, the time is taken and the documentation process might all vary based on the business type and the industry to which the business belongs. And the Rates Vary by Startup vs History of the business.

Travel merchants online and brick and mortar stores

If you look at the broader classification of industries or businesses merchant account providers sort them as High Risk vs Low-Risk categories. This is often based on the chargebacks expected and the type of transactions that occur. Take the case of online merchants like e-commerce sites or online travel agencies– the payment is done before placing an order. The same happens even with most of the travel agencies that operated out of a physical store. People pay for their travel package on the website of the travel agency or even at the office with their Visa/Mastercard/Discover/Amex cards. In all such cases where the payments happen before the completion of the order, there is the chance of the customer requesting an order cancellation. At such instances, the paid amount would have to be refunded to the customers according to the refund policy followed by the business. The merchant account provider would have to bear the extra fees incurred in chargebacks and therefore labels such businesses as high-risk businesses.

Travel agencies are denied accounts by most credit card processors

Most of the travel bookings involved large value transactions. Friendly fraud transactions are very common in the case of travel booking. This is where customers use their cards to book a travel package with a credit card and later demand a chargeback.

There has been a long history of fraudulent activities in the travel agencies and large chargebacks that have put merchant account providers in trouble. The statistics are so alarming that most of the conventional credit card processors deny or shut off travel agencies.

Travel agencies might involve part payments or full payments that are done several months in advance. Change of plans can lead to cancellations which in turn can cause overheads and losses for the merchant account provider.

Finding a high-risk merchant provider

For all the travel agencies who cannot get their merchant account application approved with the popular credit card processing firms, there are the high-risk merchant account providers. These are merchant services that cater to all types of businesses. They have Startup Ok structure and they cater to businesses with any background and those from any industry. Here are some of the benefits that travel agency businesses can reap by approaching a high-risk merchant service provider –

• Even high-risk businesses like travel agencies can avail lower rates than most other credit card processing companies.

• There are no setup fees involved for the business to get the merchant account live.

• There are no applications fees and the application can be submitted online. The approval takes place quickly and so does the processing.

How do these high-risk merchant services manage to handle the risks? They work with multiple underwriting banks. So even if the funds are running short due to overflowing orders, the merchant service provider would be able to handle refunds instantly. When the refunds happen on time the travel agency can maintain its reputation. This is very crucial for both new businesses and established firms in building a better rapport with the customers. Besides the plenty of other benefits that the high-risk merchant service provider offers there are additional perks that the travel agency can make use of –

• A smooth and reliable virtual terminal and gateway setup. This prevents the occurrence of failed transactions which again involves additional costs.

• Payments could also be handled through iPhone/Droid Mobile Apps besides those on the website.

All of these advantages put together with the quick setup of the merchant account makes it possible for travel agencies big and small to be able to carry out their businesses in a smooth manner.

How do you choose between overseas and domestic accounts?

To begin with, be clear about the type of travel packages you offer. If your business only caters to local tours and all the transactions only happen within the same country then the situation might be slightly different than for those businesses where there might be plenty of offshore transactions. Offshore accounts, though slightly more expensive than domestic accounts, are known to fetch a good value because there are multiple businesses that require accounts in several foreign countries. This also helps make use of the payment methods that are popular in the country of operation. And when there are banks from multiple locations being chosen the risks are distributed and therefore the account becomes easier to handle. For the startups for which an offshore account is irrelevant, a good domestic account with credible merchant support would be the most economical choice to make. And with the account located in an easily accessible location, the security offered here also increases which is a good thing for the small travel agencies.