What Is A Timeshare & How Do They Impact Merchant Accounts?

A timeshare is a vacation property where the ownership of the property is split among multiple parties. Each owner is assigned a set of predetermined dates during which they can use the property throughout the year. The easiest way to understand how timeshares work is by looking at an example.

For instance, the ownership of a suite at a resort in a tropical location could be divided among 52 different owners. Each owner is assigned one week out of the year during which they can use the property.

Depending on the purchase price of the timeshare and the annual maintenance expenses, this often winds up costing less than renting a room at a similar resort, which is part of the appeal of the timeshare model. As long as the owners don’t mind going back to the same location year after year, owning a timeshare can be an economical option – especially if the annual maintenance fees and homeowner’s association expenses are low.

Who Needs A Travel or Timeshare Merchant Account?

Companies that sell timeshares often hold special marketing events. During these events, they invite potential customers to visit their properties so that they can learn more about them and experience everything that they have to offer. They often give away free prizes as a way of enticing people to sit through sales presentations during their visit.

After learning about the property, customers have a chance to make a down payment on a timeshare of their own. Usually, they are given a specific number of days during which they can change their minds after making this down payment. The amount of time available can vary. In most cases, however, they have a week or two to make a final decision before they are fully committed. If they decide against the timeshare during that time, the money is refunded.

Many people get caught up in the excitement of the sales presentation and wind up committing to a timeshare at these events. After they get home and have a chance to think about their decision, however, they may have second thoughts. As a result, timeshare merchants often have a higher-than-normal percentage of refunds when compared to other industries.

Are There Risk Factors?

Over time, this has caused banks to take a negative view of businesses in this industry. In fact, many traditional banks now refuse to provide merchant accounts to companies that sell timeshares, simply because they consider them to be high-risk businesses. Instead of taking a chance on getting a lot of chargebacks or refunds, banks would rather avoid working with timeshare companies altogether.

Despite the negative reputation that businesses like these have in the banking industry, they actually are quite stable. Along with processing down payments, most merchants in this category also accept payments from customers for goods that they purchase when staying at the timeshare. This might include payments for souvenirs, activities, or dining. Chargebacks on transactions like these are rare.

Timeshare owners are also responsible for paying annual maintenance fees and HOA dues. Again, expenses like these are rarely subject to chargebacks. If customers do try to back out of paying, the timeshare company typically has a signed contract on file, which means that the chargeback can be successfully challenged by the merchant.

Even though the timeshare business model is extremely profitable, owners of these properties may have difficulty finding a traditional bank that is willing to provide them with a merchant account. Instead, they usually have to look for merchant account providers who are willing to work with businesses that are classified as high-risk.

Luckily, there are a lot of companies out there that fall into this category. The only downside is that the fees for these accounts may be slightly higher than traditional merchant accounts, simply because the credit card processing company is taking on a higher level of risk.

Travel Merchant Accounts: Are They Worth It?

Despite the higher fees, it is still worth it for timeshare owners to try to obtain one of these accounts. Without an active merchant account, they can’t accept credit card payments. That severely limits their options when it comes to collecting payments from clients.

In this day and age, it is essential for businesses to take credit cards. Most people no longer pay for services using cash or checks. For timeshare companies, that means that they need to be willing to take a slight hit on their merchant fees to get set up with an account that they can use to take credit card payments.

Even though it may not be fair, it is one of the realities of doing business in this particular industry. Timeshare merchant accounts are typically considered to be high-risk accounts. As a result, they carry higher fees. The approval process may also be slightly more difficult than applying for a traditional merchant account.

As long as timeshare companies are willing to pay the higher fees and to jump through a few additional hoops, however, these accounts can be a good option. Having an active merchant account makes it possible to accept credit card payments, which is essential for any timeshare provider.


What Is The Usual Timeframe For Application Approval?

JJS Global generally receives an answer from one of its’ merchant acquiring bank providers within 3 working days. Upon receiving a merchant account approval notice, a JJS Global Account Manager communicates all the credit card processing terms and conditions of the bank to the merchant. If the merchant accepts the offer, a merchant account contract is emailed to the merchant for them to sign and return the contract back to JJS Global. Live processing can usually start 24-48 hours later.


Applying and processing for a new merchant account is easy and takes a very short time. Send us your request by completing the application below.

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