Once a business can get merchant services, those services are a key asset for businesses selling online or looking to provide versatile ways of payment in-store. They provide the tools for all sorts of consumers to pay with credit cards, debit cards, and other online transaction services, and they can help a business run more efficiently.
Merchant services also provide the consumer with a certain amount of fall back protection. Behind this protection comes a reluctance from merchant service providers when it comes to high-risk industries such as travel.
The reluctance that merchant service providers express surrounding industries like travel results, very often, in higher service rates for businesses. When a merchant service provider is willing to work with travel businesses, these high rates can be an issue. This is an issue that Protected Trust Services (PTS) addresses through our trust account solution so PTS members can access the most efficient payments services without hindrance.
Is It Normal For a Travel Business To Struggle To Get Merchant Services?
If you have tried to get merchant services and have been turned down, rest assured that this is very normal in the travel industry. Protected Trust Services (PTS) are often approached by startups and trading travel businesses who require support with merchant services and card acquiring.
Many startups will set up a business bank account and put their beautiful new website live, only to have their application for merchant services rejected. Unfortunately, businesses in travel cannot approach card acquiring as just another tick on their to-do list, and gaining merchant services can often be the hardest part of setting up a travel company. If you have been declined by your bank or a plethora of merchant providers, there is no need to panic. This is completely normal in today’s card acquiring market.
Though merchant service providers are often very cautious within the travel industry, and may charge high rates if they do work with travel businesses, this common issue is not one that cannot be addressed. With the right financial protection in place for your travel business, such as the PTS trust account, getting merchant services can be much simpler. Financially covering the areas that make providers cautious will offer more stability both ways.
Why Are Merchant Providers Cautious In Travel?
So, why actually are merchant providers so cautious with travel businesses? Well, the reason many merchant providers decline travel businesses is that the travel industry is considered a high risk to most financial institutions. To put this into context, travel is in the same category as diet companies with money-back guarantees, or adult entertainment companies.
When a purchase of over £100 is made by credit card, the merchant provider is required by law to guarantee that payment. In areas like travel, diets, entertainment, and others that focus more on an experience than a single product, this guarantee must still be given, but generally will get more backlash from consumers, especially as travel is often considered a luxury for many consumers.
If the consumer felt there was any area within the package that was not fulfilled – such as the quality of a hotel or incorrect flight details – they can make a chargeback on the card payment. The card provider is first in line for this refund. Unfortunately, consumers are more likely to dispute and chargeback travel agency transactions than most others. Furthermore, if a travel agency or tour operator were to collapse, the merchant providers can be liable for refunding any affected clients.
The fact that travel payments are made further in advance of the delivery of the product than other industries also affects this. Because there is more time between the payment for the holiday and the holiday itself, this increases the chance of situations such as the agency or operator collapsing before a product is delivered.
In this way, being able to display to the merchant provider that situations like the company going bust, or the money getting paid in advance won’t fall on the merchant provider can give more security. If the consumer is able to receive a refund or compensation in other ways, such as ATOL or a trust account system, that promotes more confidence from the merchant provider.
A Trust Account Can Help You To Acquire Merchant Services
Merchant providers are understandably risk-averse, and as such, they have a tendency to forego working with industries that they see as a potential avenue for losses. But by mitigating the risk to the merchant provider, you can thereby improve your chances of working with them.
By using a properly run trust account system to protect the client monies, the merchant provider has the added assurance that the client’s money is protected and remains available to be claimed back, should a problem arise. Furthermore, if consumer monies are held in a trust account, the client money remains safe if a travel company were to collapse or choose to close.
With this added layer of security, the likelihood of a consumer going to the merchant provider for chargebacks is significantly lower. Not only does this method counter the original risk of working with travel businesses, but because a trust account system ensures the money isn’t going straight to working capital and is available to the consumer if necessary, that is even more assuring for merchant providers.
How Can Protected Trust Services Help Me Get Merchant Services?
The most obvious way that we help our members is by providing a trust account to help mitigate the risk to the merchant provider, but we do more than just that.
The Protected Trust Services (PTS) trust account system is efficiently, transparently, and properly run to ensure complete security from start to finish. With independent trustees in charge of all payments going in and out of the trust account, a transparent and efficient software system that allows PTS members to see and control everything without delays, and the PTS team reconciling monies daily down to each individual booking, we at PTS provide confidence to consumers and merchant providers alike.
Many travel trust solutions will ask their members to acquire their own merchant services, despite it being the area that applicants usually require the most support. Rest assured that PTS are always happy to support our members through their applications, including applying on your behalf.
Our risk and compliance team process a number of applications every day, so we fully understand exactly what each merchant provider will require and precisely why they require it. This allows us to fully support both our members and the merchant providers through each and every application, and we are proud to say that we have a 98% success rate in gaining merchant facilities. We also work directly with merchant service providers, including both Opayo and Global Payments, so we have a direct line to their teams to discuss and aid your application.
This is a completely complimentary service for all PTS members and is invaluable for most tour operators and travel agents. For more information on how we can help you, please visit our merchant services page. Alternatively, please feel free to contact us directly via ask@protectedtrustservices.com, or by telephone on 0207 190 9988. We look forward to hearing from you.
