Merchant Account for Travel Companies

June 7, 2018

Merchant Account for Travel Companies

Businesses that provide travel services are ranked among the highest-risk businesses. Why? One of the reasons is that any problems or disappointments that a traveler may encounter can result in a chargeback.
And we all know that travel is rarely an entirely hassle-free experience. It never has been. The word travel itself is derived from old words meaning “instrument of torture,” “to torment” and “trouble.”

Intrepid wanderers assume that they will face some challenges on their journeys (and may even relish the idea of roughing it). Business travelers just power on through bad airport experiences and ugly hotel rooms. But folks who have been saving up for their once-in-a-lifetime vacation, or got a great deal on their trip, expect to experience perfection. Anything less, and chargebacks are likely to follow – and the most obvious target is your travel business.

And then there’s fraud. The online travel industry has been hit by an increasing number of fraudulent charges from criminals who have learned how to profitably exploit security loopholes in transportation and hotel bookings. The total cost of fraud in the travel industry is expected to exceed $25 billion globally by 2020. Online Travel Agents are predicted to be the worst hit, with estimated loss of nearly $11 billion globally.

How “high-risk” affects your business now
An industry that is associated with a significant percentage of chargebacks and fraud is considered to be a high-risk industry. The risk level climbs even higher when you factor in conducting business in countries outside of the U.S, processing payments in more than one currency, and – in many cases – selling services weeks or months before they are delivered. While these activities all make perfect sense in the context of the travel business, financial firms see them as huge red “danger” flags.

Its also important to know that a chargeback is different than a refund. A chargeback indicates that the customer feels they did not receive what they paid for, and therefore they refuse to pay for it. When a payment is made by credit card, the customer is assumed to be right. The merchant then has to prove when it comes to travel expectations. One person’s idea of an ocean view (“Yes, you can sort of see the ocean if you stand on a chair, dangle out the window and squint really hard”) is another person’s description of a trip gone horribly wrong.

Battling fraud and chargebacks
Whatever the reason – be it outright fraud or disappointment – chargebacks cost merchants money and – potentially – can ruin a business. If your chargeback rate exceeds 2% of your transactions, your merchant account will almost certainly be frozen or terminated. That means you can’t process payments by credit or debit card until your account is restored from its frozen state, or (if you’ve been terminated) you manage to find a Payment Processor who will work with you. Most will refuse to do so, once you have an account termination on your record.

Here’s the good news: T1 Payments won’t immediately disqualify you even if your merchant account was terminated. We specialize in working with high-risk businesses, and we understand the particular challenges they face. We don’t write you off just because you experienced problems that are all too typical in high-risk industries such as travel; whether you’re a travel agent or tour operator, sell vacation packages or timeshares, or provide lodgings, tickets or deals and services for incentive, rewards or membership programs.
Our experience with high-risk industries allows us to offer solutions and guidance that help you mitigate risks. We offer fraud scrubbing technology, and chargeback monitoring, along with flat-fee merchant accounts to help your business (and you!) grow and prosper.
To find out more about T1Payment’s customizable global payment solutions for high-risk merchants please visit or call 866-518-2216.