Getting the right merchant account for travel agency use is a crucial part of the travel industry. Reliable payment solutions are needed to handle large volumes of payments, both locally and internationally.
A solid travel merchant account is the foundation for accepting online debit and credit card payments. It means these companies can accept payments from around the world seamlessly. We’ll be looking at what travel merchant accounts are, why they’re important, and how you can open one. What is a merchant account for travel agency use, and how does it help your online credit card processing? Find out in this article.
What is a merchant account?
It is an account type that is used to accept payments. Merchant accounts work with a payment gateway to accept debit or credit card payments online or offline.
Once the payment is authorized, the merchant account temporarily holds the funds before settlement. The funds then land in the merchant’s regular business account after the full process is completed. Depending on the way the payments are accepted, some merchant accounts don’t hold funds, and the payments from customers go directly to the company’s business account.
Why travel agencies need a merchant account
Merchant accounts are widely used in different industries. When it comes to travel merchant accounts, this is a recommended type of payment processing that fits well for the following reasons.
The top merchant services for travel agencies accept online and global payments. A travel agency merchant account has to smoothly accept online payments from clients all over the planet without any delay.
Handling multiple currencies. The travel industry has to deal with many currencies, as customers from different countries make bookings online. Their travel merchant accounts need to handle these currently without adding to the time or creating more fees.
Dealing with refunds, cancellations, and chargebacks. All of these situations are handled effortlessly by a travel merchant account. It means there is no need for manual intervention to deal with even complex cases.
Dedicated travel merchant accounts offer a way to boost the customer experience. They find the payment processing smooth and effortless, which builds trust. Always look for a merchant account that makes life easier for you and your customers.
Open an account
in Genome online
Why travel agencies are considered high-risk businesses
As a high-risk merchant, travel agencies need to take great care of their payment processing. There are several reasons why this is considered a particularly high-risk area.
The first reason is that a travel merchant may have higher chargeback rates. It is typically due to the long period between paying for the service and the travel taking place.
The travel industry often involves high-value transactions, which may be canceled if the client changes their mind. Travel merchant accounts are also prone to suffering fraud that is difficult to prove.
These factors mean that travel payment processing is considered riskier. It makes it more difficult for banks to approve merchant services accounts for travel agencies. They may also need to pay more for their payment processors as a high-risk merchant.
How to manage and reduce risk
While a travel merchant account is categorized as high-risk in terms of payment processing, there are some steps you can take to lower this risk.
Provide clear refund policies. The policy on refunds and cancellations should be shown clearly on different pages of the travel website.
Use fraud detection tools, such as geolocation checks and velocity checks.
Offer a high level of customer service that encourages clients to contact the travel agency rather than getting in touch with their card company right away.
Benefits of a merchant account for travel agencies
Travel merchant accounts offer a variety of benefits for travel agencies seeking a better payment processing solution.
Ability to accept global payments. It allows travel payment processing to be carried out for customers anywhere in the world.
Faster transaction settlements. With payment processors that move the funds quickly into your account, you get improved cash flow and better operations.
A boost to credibility. The travel industry relies heavily on client trust. By offering secure and widely-recognized payment solutions with fraud protection, tour operators and agencies can gain more trust.
Chargeback protection. The right payment platform will provide access to dispute resolution tools and support. It is vital for travel merchant services, due to the high-risk merchant category that the travel industry falls into.
Better reporting. The use of detailed transaction insights allows better financial planning, which is crucial in the travel industry.
You should know the difference between a payment gateway, a processor, and a merchant account. These elements all work together to ensure a smooth process for many travel merchants.
How to get a merchant account for your travel agency
Opening a reliable travel merchant account isn’t as difficult as you might think. Follow these steps and you’ll be able to deal with your travel payment processing professionally in no time.
Choose a payment solutions provider
Look for a provider that has experience with high-risk industries like the travel industry. It ensures that they can handle issues such as chargeback and potential fraud more effectively than traditional banks.
For instance, Genome offers merchant accounts to travel agencies, allowing them to accept payments via SEPA Instant Transfers within seconds.
Prepare the documentation
Your business license, financials, and processing history are important. Having these necessary documents ready ensures you are authorized more quickly with a payment processor that meets your needs.
Carry out the underwriting and compliance checks
Know your customer (KYC) and anti-money laundering (AML) checks are part of the normal process when you register for a travel merchant account to accept credit card payments.
Integrate and test the payment gateway
The payment process can be easily integrated into your travel services website, allowing clients to pay easily. For instance, test the credit card processing services before going live to ensure the setup works perfectly with both debit and credit cards. Note that different providers offer various payment methods for customers, such as Open Banking transfers, alternative payment methods, and more.
The travel business generally involves relatively large amounts of money, so transparent fees are important when you start to accept credit card payments.
The best travel merchant account will also ensure compliance in crucial areas like the Payment Card Industry Data Security Standard (PCI DSS) and the Second Payment Services Directive (PSD2). PCI compliance gives a secure environment that follows the standards set by the leading card networks.
Open an account
in Genome online
Key features to look for in a merchant service provider
When choosing a travel merchant account for payment processing, consider the following key points to make an informed decision.
Multi-currency support with international coverage. It means that you can carry out travel credit card processing for a much wider range of clients. Additionally, as in the case of Genome, businesses can have multi-currency accounts. It means that when they accept payments to their settlement account, they can then exchange funds between their other business accounts in 12 different currencies.
A selection of fraud prevention tools. As a high-risk merchant, everyone in the travel business should look for a merchant account provider with a focus on fraud prevention.
Transparent pricing structure. You don’t want to pay too much for your credit card processing. Look for a business model that lets you process payments quickly and at low cost, with no hidden fees.
API or platform integration with booking systems. You need to let visitors switch effortlessly from booking engines to the page where you process payments. A solid API or simple platform integration will help you to do this.
24/7 support and fast settlements. The travel sector works 24/7, so to help your business thrive, you need to give payment options and customer support constantly.
Common challenges and how to overcome them
The travel business has some common challenges with payments that aren’t present in all other industries. What are they, and how can you overcome them for better e-commerce results?
High chargebacks. Since travel businesses have a high risk of chargebacks, you should use 3D Secure and pre-authorization to avoid risky transactions.
Seasonality is another issue for tour operators and other travel businesses. Flexible account terms allow you to handle this factor more comfortably.
Currency volatility is another issue when selling travel services. In this case, support for stable currency options helps high-risk merchant accounts avoid volatility.
Fraud risk. Since the travel industry is classed as high risk, machine learning models and other fraud detection tools are extremely useful.
Future of payment processing in the travel industry
The payment processing industry continues to change. The future of online card processing is likely to see new ideas introduced to increase the safety and convenience while protecting customer data.
Shift toward digital wallets
We can also expect to see a wider use of open banking and instant payments. When compared to present transactions, these methods provide safe, tailored solutions for any business type.
The role of fintechs in streamlining travel transactions
The sometimes complex nature of the business carried out by travel agents means that professional, innovative account services are needed. Genome is a leading fintech that ensures your business processes payments securely. As an electronic money institution (EMI), you can be sure of a safe, regulated approach on our side.
We are currently offering businesses merchant accounts that come with Open Banking integration. It means you can accept payments from customers via direct bank transfers. Both SEPA Instant and Credit Transfers are supported by these features, ensuring your company can collect payments across Europe. Card payment processing is coming soon.
Open an account
in Genome online
More emphasis on security
Any e-commerce business has to ensure that it holds funds securely and handles payments appropriately. You should carefully review the security measures on the payment methods you use.
Customer trust and cross-border accessibility
A tour operator or other travel business has to earn the trust of its clients. By adding cross-border accessibility, these businesses can accept a greater range of transactions as part of their growth plans.
Get a merchant account for a travel agency or other type of travel business, and you can start to process your payments more efficiently.
