Travel Agency Merchant Account
Tourism is a huge industry comprising mainly of attractions, accommodation, and transportation. Planning and reservations for trips are usually handled by travel agencies. They offer travel packages whether for leisure, business, or anything in between. Online reservations are a big thing, and so a travel agency merchant account is required for these businesses to get started.
In 2019, the travel industry contributed 2.9 trillion US Dollars worldwide. In the same year, Macau produced the highest (Gross Domestic Product) GDP due to their attractions, while Europe profited largely from hotel bookings. Revenues made by local and international airlines totaled 838 billion US dollars globally, according to market research site Statista.
To know more about merchant services for travel agencies, read on.
What is a travel agency merchant account?
A travel merchant account provides credit card processing, settlement of transaction through an electronic check, and automated clearing house payment to tourism businesses.
Traveling is now made easier through online reservations. Online travel agencies (OTA) are booming as the demand for competitive packages continues to rise. The procedure is fast, convenient, and there are many travel options to choose from.
It’s worth noting that tools used for online booking are categorized into two types: OTA, and through a fare aggregator. OTAs combine booking tickets with a tour, making it hassle-free to travelers.
On the other hand, fare aggregators utilize readily available sources from lodging services to air carriers, including OTAs. The OTAs will then give referral fees to these aggregators.
Although traditional and online travel agencies provide the same service, the traditional, non-online ones must come up with creative ways to attract more customers to compete with the accessibility, convenience, and affordability of the travel agencies with online presence.
Services offered by travel agencies
Air travel is the most popular mode of transport especially for traveling abroad. It’s fast, generally comfortable, and connecting travel routes are much easier to navigate from airports.
Land travel, consisting of high-speed trains, buses, taxis, and even limousines are popular in parts of Asia and Europe. They are highly efficient and can be suggested to a traveler who would like to have a great view of the area.
Sea travel is popular with those who want to experience cruising oceans aboard luxury ships, yachts, and boats. It is also offered to those seeking a peaceful timeout in remote islands complete with everything a traveler needs.
Also, accommodation provided by hotels, rented homes, and other types of lodging can be provided for a worry-free vacation.
To maximize stay in a certain area, packages such as island hopping, wellness treatments, and cultural tours can also be included.
What a travel merchant account can do to your business
Merchant services for travel agencies cater to both traditional and online businesses. Both can benefit from merchant accounts as they provide online payment services and POS (point-of-sale) card acceptance.
Integrating with a payment processor allows customers to purchase all types of travel tickets and packages from your website. Most merchant account for travel agency provide value-added services such as customizing specific features based on the capacity of your business.
Common problems and solutions for travel agencies
Like any other business, the travel industry has its own concerns. From new business challenges to travel industry payment processing solutions, below are the common issues.
1. In a business provider’s point of view, a travel agency payment processing is a high-risk sector, as chargebacks are very common. It is caused when a customer pays for a booking then cancels, usually at the last minute. If cancellation and refund are not allowed, the customer will try to dispute the charge made by the travel agency. It will then have an adverse impact on payment processing for the travel agency.
To combat chargebacks and other fraudulent activities, post a disclaimer on your website or social media accounts, and offer a reliable customer service support manned 24/7 that can assist client concerns such as change of travel date, new preferred destinations, and the likes, lessening the risk of cancellation.
2. Offering services that reach domestic and international boundaries is challenging as you must comply with different laws. For smooth operations, seek legal assistance and establish a guideline. It is also advisable to find a travel law agency to help set up your business.
Familiarizing yourself with the legal duties and responsibilities of a travel agent also helps.
Furthermore, to protect you from claims caused by unforeseen mistakes, it is highly suggested to avail of a professional liability insurance.
3. If you are intimated by established travel companies, equip your business with a personalized and authentic service.
Concentrating on a specific location will also help your business to stand out.
Make your enterprise known for its impeccable customer support, user-friendly website, and affordable travel packages.
4. As stated earlier, this type of business is considered high-risk making travel industry payment processing limited. If you plan to use the services from banks, building good credit will help you get a merchant account easily.
Additionally, providing a well-crafted business model backed with a record of excellent customer service, and a structured website establishes trust and further builds the legitimacy of your business.
How to be approved for a travel merchant account?
Simply open a bank account and look for a processor willing to assist you and your high-risk payment transaction. Most banks accommodate those with favorable payment processing for travel industry applications.
Make sure to have your latest six months transaction records showing few or if possible, no chargebacks.
Additionally, make sure that your processor is familiar with techniques about fraud prevention and identifying vulnerable areas in the procedure.
For those with new ventures, present your ideas including customer service approach, marketing strategy, and other information that would make your business profitable.
What are some tips to get my travel agency merchant account approved?
1. Be honest with your processor. Any questionable information in your business statement may affect your request.
2. Shape up your venture’s finances. See to it that your business has consistent growth for the past three to six months.
3. Consult other processors. They may offer better advice and are more experienced in assisting fraud. Some may also provide vast choices when it comes to payment processing.
4. Sign up for a trade association. Aside from extending your network, these organizations offer seminars that can help your business grow.