- December 23, 2019
- Posted by: admin
- Category: Travel Agency Merchant Accounts
Who doesn’t love to travel? The excitement of seeing a new place, and the anticipation of experiencing something new. Travel is an industry that brings a lot of fun, excitement and meaning to people’s lives. It’s definitely not by any means an industry with a bad reputation. What’s really surprising the management team in many travel businesses then is the fact that getting approved for credit card processing can be difficult within the umbrella of the “travel” industry.
Travel is a multi-billion-dollar, global enterprise consisting of multiple industries, including, hospitality ,transportation and tourism services. As a result of this increasing affordability of mass transportation, logistics and lodging has opened door to remote destinations to millions of people worldwide, creating new forms of travel, including participatory, educational and eco-tourism categories which is great.
However, owning a high-risk business doesn’t mean you won’t be able to open a merchant account. It means that it may be more challenging to set one up.
Why is the travel industry high-risk?
The volumes in travel are huge, and the ticket sizes so large that it can lead to devastating financial losses for a payment processor. Let’s have a look at three main reasons why travel niche ranks high risk:
1. A high rate of chargebacks.
2. An average check amount.
3. Transaction volumes.
To increase your merchant account eligibility, make sure you follow these tips:
Always be willing to pay fee on the higher side or accommodate special account requirements: If you need to abide by special restrictions or pay slightly higher fees in order to open a merchant account. It’s completely worth it to provide your customers with as many noncash payment options as possible. It will help you generate revenues and stimulate impulse purchases.
Get an indemnity: To be short and sweet, get tourist insurance. Each and every one who deals with travel has to be ready for unexpectable challenges. Jokes aside, you don’t want to lose your business due to aggressive animal attacking a tourist of yours. The indemnity has to cover death, injuries, and financial risks.
Ensure a positive credit rating: Clear any past bankruptcies, late payments or liens from your credit report before you apply for a merchant account. To receive your credit report, contact a credit reporting bureau such as TRW or a company that provides merged credit reports. Write to them, and clearly explain that these matters have been cleared up and ask that they’re removed from your credit report. Whether you own a small or large business, having a good credit rating is like nuts on cookie which will leave an lasting impression with a transaction processor.
Prepare your processing history: Processing history is a mandate for your application package. It is a clear sign of your company’s financial health. Low-risk businesses are supposed to send at least three months of credit card processing statements. That can’t be said about travel. And moreover it is also a seasonal business. It usually experiences peaks and valleys. Hence, it is better to send a one-year worth credit card processing statements. The PSP will check your volumes, chargeback activity ,refunds , and make a final decision.
Always be honest about previous merchant accounts, liens or judgments: By acknowledging past financial challenges, you improve your credibility and may encounter one less barrier to opening a new merchant account. You cannot take a chance and hide information that’s part of the public record.
Apply now for a travel merchant account with iPayTotal.
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