Travel Agencies and related travel-oriented businesses are considered high-risk merchants as far as credit card processors are concerned, and therefore are among the most challenging business types to get successfully approved for a Merchant Account. . The reason is that experience proves that consumers are considerably more apt to dispute and charge back travel agency transactions than most others. In fact, travel agencies are placed in the same risk group with merchants selling adult products, escort and companion services, fortune tellers, diet programs, sports forecasting or odds making, and other high risk business types. Unfortunately, for the Travel Agent, that means utilizing mainstream credit card processing networks such as the local dry cleaner and pizza restaurant use is not an option as they won’t even consider most travel related businesses.
So what to do if you have just started your travel agency or have been in business for years in order to mitigate this payment processing risk and get a Merchant Account?
For starters, obviously you must apply for a merchant account with the appropriate type of payment processor, which means one that specializes in high-risk merchant accounts–otherwise you are simply spinning your wheels and wasting your time and money. Fortunately, there are several processing networks available that do specialize in such higher-risk merchant types, unfortunately at a slightly enhanced cost consistent with the enhanced risk involved.
You will also need to understand the potential liability associated with selling travel services online. Even more importantly, knowing what to expect as far as requirements and processing procedures are involved, and selecting a high risk processor with the knowledge, capability, and willingness to effectively train and guide you in these areas is imperative. Understanding your risk exposure will help you take adequate steps to minimize it and protect your travel agency from losses associated with chargebacks resulting from customer disputes and fraudulent transactions.
To mitigate your risk and insure your acceptance for a high risk merchant account, you will need to set up card acceptance policies and procedures to address several risk related issues, including for example:
- An authorization request that is approved by an issuer indicates that the credit card account is in good standing. However, the approval is NOT a proof that the legitimate cardholder is making the purchase, nor is it a guarantee of payment. Be advised that, in most cases, airlines are liable for fraudulent card-not-present transactions, even when they were approved by the card issuer.
- As a travel agency, your organization may not necessarily be a Visa or MasterCard merchant, subject to the Credit Card Associations’ rules and regulations. However, the airline is a Visa and MasterCard merchant and it is subject to their rules and regulations. Be advised that, in most fraud-related transactions, the airline transfers financial liability to the travel agency it has partnered with as part of the contractual agreement. In such cases your organization will bear the full financial responsibility.
For more information on high risk processing for the travel industry, please CONTACT US, call 1-877-689-1691, or email amspcs@juno.com.
Click here for a free no-obligation quote on a high-risk merchant account.
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