Travel agencies and event ticket brokers are another group of businesses that fall under the high risk category. Yet due to the high ticket and infrequent nature of transactions in this business it is another industry that is neglected by traditional merchant services providers.
Nabbing tickets to a favorite band or the most talked about live performance hasn’t been about standing in line waiting for tickets at a box office for years. A major shift from physical tickets and at-home printing to fully-digitized mobile ticketing have led to the dramatic growth of the online event ticket sales industry. The convenience and simplicity of online purchasing, specifically via mobile wallets, fingerprint scanning, and digital ticketing, have allowed the online event ticket sales industry to expand and increase profits. The $5 billion industry grew 4.8% from 2011, according to report from the industry research firm, IBISWorld. As the economy continues to grow and technology continues to advance, online ticket sellers are likely to remain the primary source for tickets for sporting events, concerts, festivals, public appearances, and plays.
The online event ticket sales industry is ripe for hungry entrepreneurs because four of the 562 companies account for just over 22% of the industry’s revenue in 2016. Since those in the sector adopt new technology and effective cost controls quickly and the products are consumer friendly, the industry is expected to continue growing.
Online ticket brokers and other businesses that depend on transactions being paid via credit card likely will have difficult time obtaining an online ticketing merchant account. This type of account is necessary for merchants to efficiently process payments. Traditional financial institutions turn down many of these businesses because they are considered high risk. Merchants that want to effectively process credit card payments need to turn to a processor, like eMerchantBroker.com (EMB), to apply for an online ticketing merchant account.
Fill out EMB’s online application today and get approved for a merchant account within 24 and 48 hours. EMB specializes in offering high-risk merchant accounts, including those for online ticketing businesses. EMB sets up online event ticket broker merchant accounts with multiple PCI-compliant payment gateways that can accommodate every business’ technological needs. Additionally, EMB offers chargeback management tools and fraud filters.
Types of Online Ticketing Merchant Accounts
The online ticketing industry includes online retailers and resellers of tickets to live events. To keep up with the popular demand to see latest musicians and events, online ticketing businesses need to have access to the best shows and secure payment processing solutions via merchant accounts.
Get a merchant account from EMB for businesses that offer online tickets for the following events:
- Children’s and family-themed performances
- Dance, opera, and theatrical performances
- Music concerts
- Public appearances, fairs, and festivals
- Sporting events
High-risk merchants are EMB’s specialty and the firm’s experts will work hard to help online businesses of all sizes to succeed. Most importantly, EMB has a long history of working with new and existing businesses, merchants rejected or terminated by other credit card processors, as well as merchants with no credit, bad credit, or high chargebacks. Start the process by applying for an online ticketing merchant account now.
Online ticketing merchant account application requisites
Businesses can apply for an online ticketing merchant account by filling out EMB’s quick online application. Along with their applications, merchants will need to submit the following items to processors and underwriters:
- A valid, government-issued ID, such as a driver’s license
- A bank letter or a pre-printed voided check
- Three months of the most recent bank statements
- Three months of the most recent processing statements, if applicable
- A SSN (Social Security Number) or EIN (Employer Identification Number)
- Chargeback ratios must be under 2%
- A secure, fully-operational website
Though EMB cannot guarantee any approvals, it does promise a quick, streamlined application process. If eligible, approvals are granted within 24 hours.
Understanding the underwriting process for online ticketing merchant accounts
The main duties of underwriters are to determine risk and to ensure online ticketing merchants are operating legal, responsible businesses. During application reviews, underwriters look for any practices that are suspicious are cause a negative financial impact to credit card processors. A business model based on a strong foundation is a sign to underwriters that a merchant will not rack up excessive chargebacks – when a credit card company demands a business refund the cost of disputed or fraudulent transactions. Too many chargebacks eventually lead to a processor shutting down an online ticketing merchant account.
To determine risk, underwriters look at a business’ credit scores, credit card processing history, bank statements, and website. In addition to a high chargeback ratio, previously terminated merchants, negative bank account balances, and a history of missed or late payments also result in greater risk to a processor.
Online ticketing merchants that want to boost their chances of approval should:
- Save some money
- Satisfy all outstanding bills and debts
- Encourage the business principal with the best credit history to apply for the merchant account
Following through with these steps will not only make merchants’ accounts more attractive for approvals, they may get accounts with fewer restrictions, such as caps on higher processing volumes and lower rolling reserves.
Demand and high prices make online ticket merchants prone to chargebacks
Service-oriented businesses, like online ticketing merchants, that don’t get paid during a face-to-face transaction are considered a higher risk to banks and processors because there is a greater chance of fraud. Therefore, online ticketing merchants are more vulnerable to transaction disputes.
Fraud risk is always higher when the service or product is more expensive. High-dollar amounts are much more attractive to those who commit fraud. Ticket fraud also is likely to happen a couple days before an event because that is when an event is in highest demand. Overnight and same-day ticket delivery puts merchants at higher risks of fraud.
Also, tickets bought at the last minute are often more likely to be bought with stolen credit cards. This happens because tickets are delivered electronically, giving illegal resellers to then immediately resell them.
Most importantly, friendly fraud is a problem in this industry. There are always plenty of customers who try to get something for nothing. It is not uncommon for a customer to contact a credit card company and claim that transaction was due to fraudulent activity. Customers also claim the tickets were never received or issued. This may not work in all cases, but it may beneficial to make it a practice of investigating these cases. Many public event venues, such as those that host sporting events, record entrances, seating, and common areas. Getting a hold of a surveillance video is one way to determine that a person disputing a purchase did receive a ticket. This type of evidence can go a long way in helping a merchant fight a chargeback.
High chargeback ratios come at a high cost to processors
Chargebacks have negative financial impacts on credit card processors. When high-risk merchants, such as online ticket brokers, have excessive chargeback ratios, credit card processors can get fined thousands of dollars for each merchant account. Whenever a business exceeds a 2% chargeback ratio, credit card companies, such as MasterCard and Visa, can fine the processor that approved the online ticketing merchant account.
Since fines cut into processors’ bottom lines, they terminate high-risk merchant accounts with chargeback ratios of more than 3%.
Turn down the volume on excessive chargebacks
A chargeback ratio is calculated by the number of transactions divided by the number of monthly transactions. For example, an online ticketing merchant with 50 transactions and two chargebacks in a single month would have a 4% chargeback. The dollar amount of a chargeback doesn’t matter. The fact the chargeback ratio is higher than 2% is what processors and credit card companies care about. When a ratio climbs to 3%, a processor can close a merchant account. If the account is terminated, a merchant can no longer accept and process credit card payments.
To trim down chargeback ratios, businesses must take actions. Merchants can reduce fraud risk by integrating bot blockers, captcha, and internal tools to catch fraudulent orders. Other ways to cut down on ticket fraud include restricting delivery methods, delaying delivery, and fraud detection software. Ensure legitimate customers are picking up tickets by requiring high-dollar VIP and front row tickets be picked up at will call only. Another quick way to determine fraud is to look out for tickets that are immediately available on reseller ticketing sites after the event goes on sale. A delayed print-at-home feature can cut down on illegal digital ticket sales. Also, fraud detection software can catch illegal transactions in real time.
Other ways to keep chargebacks low are to ensure customers know all purchasing policies, including that tickets are non-refundable. The policy should be clearly displayed on the company website, all promotional material, and any confirmation emails.
Finally, the merchant’s name and contact number should be clearly displayed on websites and email confirmations and receipts so customers can reach a representative if there is a problem, such as transaction being made with a stolen credit card.
A mitigation program reduces excessive chargebacks
EMB’s chargeback mitigation program can cut a merchant’s chargeback ratio by 25%. By using EMB’s elite alert and prevention system, Chargeback Shield, High-risk merchants, including online ticketing brokers, businesses can mitigate two out of 8 chargebacks.
This system is unique because EMB partnered with Verifi, its new Cardholder Dispute Resolution Network (CDRN) and Ethoca’s alert system. CDRN operates with banks and card issuers, enabling merchants to achieve the greatest rate of chargeback resolutions directly.
Merchants protect themselves from losing revenue and their event ticket broker merchant account by actively working to mitigate chargebacks.
Lose the credit card processing cap
Due to the high risks associated with these types of businesses, many online ticketing merchants are given monthly credit card processing volume caps. This means merchants can’t accept any additional credit card payments after they have reached their caps each month. This essentially keeps a business from operating when it reaches its threshold. Increased volumes are essential in online ticketing businesses because of higher ticket prices.
Merchants that do well can ask for higher credit card processing volumes caps in as little as three months. They must prove that they pay their bills, have low chargeback ratios, and have saved some money for underwriters to consider increases.
Categories for online ticketing merchant accounts
The United States and other countries assign four-digit numerical codes, known as Standard Industrial Classification (SIC) codes, to business establishments. The codes are used to identify businesses’ primary purposes.
Online ticket brokers and such fall into these SIC categories:
- 7389: Business Services, not elsewhere classified
- 7922 Theatrical Producers (except Motion Picture) and Miscellaneous Theatrical Services
- 7929: Bands, Orchestras, Actors, Entertainers, and Entertainment Groups
- 7999: Amusement and Recreation Services, not elsewhere classified
Visit the United States Department of Labor to view a complete SIC list.
The Northern American Classification System (NAICS) is a list of six-digit codes used by federal statistical agencies to classify business establishments. The codes are used to gather, analyze, and publish statistical information about similar types of businesses and the way they impact the U.S. economy.
Online ticket merchants fall into the following NAICS codes:
- 561599: All Other Travel Arrangement and Reservation Services
- 711130: Musical Groups and Artists
- 71190: Other Performing Arts Companies
- 711219: Other Spectator Sports
- 711310: Promoters of Performing Arts, Sports, and Similar Events with Facilities
- 711320: Promoters of Performing Arts, Sports, and Similar Events without Facilities
- 713990: All Other Amusement and Recreation Industries
- 812990: All Other Personal Services
Visit the United States Census Bureau to view the complete NAICS code list.
Merchant Account for Online Ticketing & Travel Agencies
Today is the best time for you to cut out the extra fees and set up the ideal merchant account for your business.
We can help get your merchant account set up in as little as 24 hours.
Our high risk processing application process is quick and easy.
Startups and small brokers will struggle to find a bank that is willing to open a reasonable merchant account quickly. The application process is loaded with requirements, red tape, and takes an unnecessary amount of time.
We Can Approve Ticket Brokers, Both Online and Off
The Hard Work is Done Fortunately we’ve already done half the red tape processes for you. Our team at eMerchantBroker has a wide network of available merchant accounts for ticket brokers and travel agencies. We’ve Got You Covered We can find your business the perfect merchant account suited to your needs. Since we’ve already done all the looking for you, we are able to simplify our application process due to our prior relationships with merchant services providers.
- We Make it Easy
- No extensive credit history checks
- No Application Fees
- Secure Payment Gateway
- Competitive rates
- No VISA/MasterCard Required
What are you waiting for? Start the event ticket broker merchant account application process today.