The travel industry is highly competitive and to succeed in this demanding business can be challenging. Running a successful travel business takes hard work, determination, and commitment. You don’t want to put yourself and your business under extra pressure by worrying about how you are going to process payments.
The travel and tourism industry may be one of the largest global industries. But high ticket prices, frequent cancellations, and fraudulent transactions mean that travel businesses are typically considered high-risk by the credit card payment processing industry, traditional financial institutions and banks. Names as Wells Fargo and Chase don’t allow travel merchant accounts. But at JJS Global we consider the travel industry to be low to medium risk and that is why we are a valuable partner for companies that are looking for a payment gateway that allows customers to quickly and conveniently pay for their holidays and enables travel websites to collect payments.
Why are merchant accounts in the travel industry considered to be high risk?
‘Travel Industry’ is a huge business industry and many travel companies are highly successful and have been around for decades. So why is a travel merchant account considered high risk and why do traditional banks not want to provide credit card processing services to this industry? The main reason is that most credit card transactions take place months before travel agencies, tour operators and accommodation providers deliver a service or product to their customers. This carries high risks for banks and makes payment processing companies nervous because they can be liable for chargebacks and open to payment disputes. As a result of these costly procedures and associated risks, many merchant account service providers are unwilling to take on clients in the travel industry. You should check our page for high-risk merchant accounts.
Why is the timeshare industry high risk?
The timeshare industry has developed a bad reputation for various reasons. When signing a timeshare contract many buyers are caught up in the moment and they don’t read the small print. This means that there is a high potential for disputes and chargebacks and many banks don’t offer credit card processing facilities to these companies.
But buyers are generally covered by consumer protection laws that provide for rescission and they can usually withdraw from the purchase within 3 – 10 days. Many travel merchants won’t key in the sale until after the rescission period has expired, rather entering the charges as an authorization so that if the buyer pulls out of the deal the merchant can issue a refund. This helps protect both the timeshare company and the buyer from chargebacks.
Finding the best payment processor
To survive in the modern world of global e-commerce, a business needs to be competitive and convenient. Most people who book a holiday online expect to be able to pay with a credit card online. Likewise, any business that takes reservations online needs to be able to accept payments online.
Every travel agent needs a convenient payment system but due to the risks in the travel industry, it can be hard for new or start-up businesses to get credit card processing from a traditional bank or financial service provider. Fortunately, they can get a merchant account from a trusted payment processor, like JJS Global that specializes in providing high-risk merchant accounts to businesses that don’t necessarily meet the qualification criteria of traditional banks.
Generally, the approval process for a travel merchant account is not an easy story. As we know for most of the payment processors, the travel and tourism business is a risky play, and that makes the payment processors tougher with the approval process. But with JJS Global, the scenario is different. For JJS Global travel merchant accounts are not of high risk, rather more of a low to medium risk. That makes the approval process far less complicated and easy with JJS Global.
Applying for a new merchant account
Any travel business that applies for a travel merchant account from JJS Global needs to provide the following documents along with their application form.
- Valid, government-issued ID, such as a driver’s license or passport
- Bank letter or pre-printed voided check
- Link to a secure, fully operational website
- Most recent bank statements going back three months
- Most recent processing statements going back three months
- Valid business registration documentation
Once the completed application with the necessary supporting documentation has been received, an account specialist will begin the vetting process. JJS Global will study your business model, bank statements and website and assess your credit card processing history, taking into account the risks that are associated with the industry in general and your business in particular. Because JJS Global understands the nature of the travel and timeshare business, they are prepared to take on the risks if your company is above board, legitimate and sustainable. The vetting process has to be thorough to protect your interests and the interests of JJS Global, but it also ensures transparency and gives you peace of mind.
Considerations when choosing a merchant account
Most credit card processors that provide support to the travel industry are focused on e-commerce and offer virtual terminals where credit card payments can be made without needing additional equipment. Virtual terminals are great for travel and timeshare businesses that have both an online and offline presence.
Travel merchant accounts typically have a monthly credit card processing volume cap, only allowing merchants to process a specific number of credit card transactions per month. This could hamper your business growth so check the transaction limit before you sign up for a travel merchant account.
The rates are often higher on a travel merchant account and this needs to be considered in your budget.
The travel and tourism industry is big business. It doesn’t just cover traditional travel agents, there are many businesses that support the travel industry and benefit enormously from tourism around the world. These include:
- Online travel agencies
- Independent travel agents
- Online travel reservation websites
- Tour operators
- Accommodation Providers
- Transport and Transfer Providers
- Timeshare Resellers
- Cruise lines
- Excursion Companies
- Ticket seller for tourist attractions
The need for travel merchant accounts has grown tremendously in recent years and since tourism remains one of the fastest-growing global industries, the demand is only going to increase. To help your travel business thrive in the modern, internet-based world, you will need a travel merchant account from a trustworthy company like JJS Global.