Smooth Sailing to Obtaining a Travel & Timeshare Merchant Account

Location, Location, Location. Travel and timeshares need to be accessible anywhere, and accept payment electronically from anywhere.

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The travel and tourism industry is one of the world’s largest industries with a global economic contribution is the travel and tourism industry. This sector generated $7.6 billion in 2016, according to Statista.

Additionally, the direct economic impact of the travel and tourism industry, which includes accommodations, transportation, attractions, and entertainment, was $2.3 trillion that same year. To cash in on the economic rewards, less well-known countries are even getting in on the action.

Taking a vacation is universally appealing, but getaways, excursions, and flights cost a lot of money and make banks nervous. Newer, less-established travel merchants have a difficult time getting financial institutions to take a gamble on their businesses because they think the travel industry is too risky. High-ticket prices, cancellations, a reputation of having large volumes of chargebacks, which are when credit card providers demand businesses refund the loss of disputed or fraudulent transactions, are some of the reasons why traditional financial institutions don’t want to give a business a travel merchant account.

Any business that takes reservations over the phone or online needs to be able to take credit card payments. When banks won’t help, a trusted, legal company that wants to process credit card payments efficiently must turn to a processor, like eMerchantBroker.com (EMB), to obtain a travel merchant account.

Since EMB specializes in high-risk merchant accounts, such as travel businesses, it tailors payment processing solutions to meet every merchant’s needs. The practical tips and suggestions here make it easier to approved for a travel merchant account. Fill out EMB’s online application and get approved for a travel merchant account in as little as 24. In addition to offering chargeback management tools, PCI-compliant payment gateways, and fraud filters, EMB works with new and established businesses of all sizes. Succeeding in business is important to EMB, which is why it makes customer service a priority.

Businesses in the Travel Industry

The travel industry is always trying to remain competitive. To stay in line with other merchants, travel businesses must accept credit cards.

Get a travel merchant account from EMB for following types of businesses:

  • Travel agencies
  • Independent travel agents
  • Online travel reservation websites
  • Tour operators
  • Lodging
  • Transportation
  • Timeshare Resellers
  • Charters
  • Cruise lines
  • Ticket sales

Other travel-related businesses not mentioned here that need help processing credit card payments should begin the application process today. High-risk merchants are EMB’s specialty. Start the process by applying for a collection agency merchant account now.

What’s needed to apply for a travel merchant account

Get started on the application process now by filling out EMB’s quick and straightforward online application. Though nothing is guaranteed, EMB promises a streamlined process.

In addition to the application, the following documents are needed:

  • A valid, government-issued ID, such as a driver’s license or passport
  • A bank letter or a pre-printed voided check
  • A secure, working website
  • Three months of the most recent bank statements
  • Three months of the most recent processing statements, if applicable
  • SSN (Social Security Number) or EIN (Employer Identification Number)
  • Chargeback ratio below 2%
  • A fully operational website

What occurs during the underwriting process

Legal, responsible businesses are the most likely to get approved for a travel merchant account. When underwriters begin evaluating businesses, they check to ensure companies are built on stable business models and don’t engage in any illegal activity.

Underwriters analyze businesses to determine their risk to processors by looking at credit scores, credit card processing history, bank statements, and websites. These are evaluated to ensure that merchants don’t have negative bank account balances, outstanding bills, and a history of high chargeback ratios. Also, a travel merchant’s website is examined to ensure it has a secure (SSL), as well as clear, prominently-displayed privacy and refund policies.

Travel businesses that have some money saved, satisfied all outstanding bills and debts, and have the business principal with the best credit history apply for the merchant account are the most likely to get approved.

Taking these actions will help merchants get approved for merchant accounts without restrictions, such as higher processing volume caps and lower rolling reserves.

Getting a higher credit processing volume for a travel merchant account

Due to the history and background of travel businesses, many are given a travel merchant account with monthly credit card processing volume caps. This means merchants are only permitted to handle a specific number of credit card transactions per month. Once that limit amount is reached, the merchant can no longer take credit cards for purchases that month. This keeps a business, especially an e-commerce merchant that relies on credit card payments, from operating.

Caps don’t last forever. Travel merchants that need higher processing volumes can request new caps in as few as three months. At that time, they must prove that they pay their bills, have low chargeback ratios, and have some savings.

Chargeback soar in the travel industry

Merchants in the travel industry are hit with so many chargebacks for a number of different reasons, including high average ticket prices. Most services related to travel often cost at least a few hundred dollars.

Since most customers pre-pay for tickets, tours, and other arrangements before they go on trips or use services, travel merchants are considered higher risk. Finally, many travel businesses end up failing. When businesses shut down suddenly, they don’t refund the cost for services and tickets that were pre-paid by customers.

Calculating a travel merchant’s chargeback ratio

To calculate a travel merchant’s chargeback ratio the number of transactions divided by its number of monthly transactions. For example, a merchant with 100 transactions and four chargebacks in any given month would have a 4% chargeback ratio. The actual dollar amount of a chargeback doesn’t matter to credit card brands or processors, it only matters that they keep ratios low.

The high cost of chargebacks to credit card processors

Risk is determined based on the potential financial loss to a credit card processor or its sponsor bank. Chargebacks that don’t get reimbursed by a merchant are primarily what drive risk. Any unpaid chargebacks, which occur when customers dispute credit card charges, become the responsibility of processors or their sponsor banks.

Additionally, credit card processors may be subject to thousands of dollars in financial penalties for each merchant account when high-risk merchants maintain excessive chargeback ratios. Whenever a business exceeds a 2% chargeback ratio, credit card companies can fine the processor that provided the travel merchant account.

When the ratios remain high, processors have no choice but to terminate their high-risk merchant accounts. To avoiding put their accounts in jeopardy, merchants must work to keep their transactions volumes high and do whatever possible to avoid chargebacks.

Take a vacation from chargebacks

To prevent chargebacks from ruining a business, merchants must take steps to avoid them. With time, evidence, and resources, businesses can stop them in their tracks.

To stop a transaction dispute from turning into a chargeback, a travel merchant must prove that a customer did, in fact, reserve and pay for the tickets or travel-related services. Merchants are encouraged to keep detailed documentation of transactions. Emails between a merchant and a customer and proof that a consumer used the same information or IP address on another occasion when a transaction was not disputed are important pieces of evidence that can prevent a chargeback.

Having clear refund and cancellation policies are critical. They also must be prominently displayed on websites, so customers can read them when they make reservations or purchases. Other policies, such as those related to recurring billing for a membership plan or package or continuity components to travel services, also should be easy to understand and quick to locate on a site.

Businesses can protect themselves by sending detailed email confirmations after they accept online or phone payments and reservations. Important details to include are:

  • Merchant’s business name
  • Contact information
  • What was purchased
  • Total purchase amount
  • Cancellation terms
  • Refund policy
  • Recurring billing information if it applies

Offering 24-hour customer service support is another way that can keep credit card transaction disputes lower. If a customer can live chat with a representative, the employee should be trained to offer unsatisfied customers with full refunds. Refunds are much more cost-effective than excessive chargebacks. To many chargebacks can cost a travel business its merchant account and its ability to accept credit card payments.

Slash chargeback ratios with a mitigation program

Since processors can terminate travel merchant accounts that don’t maintain chargeback ratios below 2%, merchants need to do whatever they can to prevent chargebacks. A simple, easy way to cut chargebacks by 25% is to use a mitigation program, like the one offered by EMB. Using the program, a merchant can prevent two out of every 8 potential chargebacks.

EMB’s program is ideal for high-risk merchants, such as travel businesses. EMB partnered with Verifi and its new Cardholder Dispute Resolution Network (CDRN) and Ethoca’s alert system to create a program that helps companies resolve credit card transaction disputes directly. CDRN works with card issuers and banks, allowing merchants to achieve the highest rates of chargeback resolutions in the most efficient ways.

Categories to use for travel merchants

Federal statistical agencies classify establishments using a list of six-digit numerical codes known as the Northern American Classification System (NAICS). The data is used to collect, analyze, and publish statistical information about similar types of businesses. The information is used to determine the way these businesses impact the economy in the U.S.

Businesses in the travel industry often use the following NAICS codes:

  • 524210: Insurance Agencies and Brokerages (travel insurance)
  • 561510: Travel Agencies (travel agents and agencies)
  • 561520: Travel Operators (bus tours, sightseeing, excursions)
  • 561590: Other Travel Arrangement and Reservation Services (online reservation agencies and travel comparison sites)
  • 454111: Electronic Shopping, Internet Retail Sales (online travel sales)
  • 721110: Hotels and Motels
  • 531390: Other Activities Related To Real Estate (timeshares)

Many travel products and services can fall into more specific, individual categories. The ones listed above are the most commonly used. Visit the United States Census Bureau’s Northern American Classification System to view the complete NAICS code list.

The four-digit numerical Standard Industrial Classification (SIC) codes are used to identify the main purposes of businesses. They are assigned by the United States and other countries.

Travel businesses often use these codes:

  • 4724: Travel Agencies (online travel agents, tour arrangement, transportation, and rental car businesses and hotels)
  • 4725: Tour Operators (tour operators, charters, and excursions)
  • 5615: Travel Arrangement and Reservation Services (online travel agencies and cruise lines)
  • 6411: Insurance Agents, Brokers, and Service (travel insurance)
  • 7011: Hotels and Motels
  • 7012: Timeshares (timeshares, recreational and sports camps, campgrounds, and trailer parks)
  • 7041: Organization Hotels and Lodging Houses (membership-based travel and lodging, such as timeshares)
  • 7375: Information Retrieval Services (lost luggage)

Visit the United States Department of Labor to view a complete SIC list.

Merchant Accounts for Travel Agencies – Tour Packages – Travel Clubs

If your business is a travel agency, a tour guide service, or involved with timeshares securing a merchant account suitable to your needs can be challenging from traditional banks who are more worried about risk and legal exposure.

Whether you are a travel agency or you offer timeshares, we have the merchant account you can depend upon.
Let us locate the best merchant account for your travel or timeshare business.
We provide merchant accounts for travel and tour related companies.
We provide processing services for advance sales.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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