Overview
Whether you sell airline tickets, cruises, hotel rooms, car rental agencies or other travel services, a merchant account is required to process your customers' credit and debit card payments. Obtaining a merchant account can be difficult for travel businesses, especially those considered high risk. When you apply for a merchant account, the bank (or processor) reviews your application and decides what degree of risk you represent to the credit card network, or acquirer.
This decision is subjective and varies from processor to processor as each assigns different weight to various underwriting criteria. A number of factors influence the outcome including:
How long your company has been in business; and, its track record of financial performance - good years and bad years. Industry sector - sectors with higher than average chargeback rates like travel, gambling and monthly membership and subscription services are marked down in the underwriting process because they tend to have more fraud issues.
Credit card companies have rules that govern what constitutes a 'travel purchase' and these differ by card issuer. For example, some cards will only allow purchases from airlines, hotels and other accommodation providers whereas others will include cruises, bus lines and passenger railways.
When seeking a merchant account for your travel agency, it is important that you find a processor that explicitly supports your type of business. It is tempting to look at big tent processing companies like Stripe or Square but, it isn't worth the risk of getting caught in the net of a merchant account termination for not explicitly supporting your business type.
