Once a business can get merchant services, those services are a key asset for selling online or providing versatile payment in-store. They provide the tools for all sorts of consumers to pay. With credit cards, debit cards, and other online transaction services 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. Aversion comes primarily in high-risk industries such as travel.
The reluctance that merchant service providers express results 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 travel. PTS are often approached by start-ups and trading travel businesses who require support with merchant services.
Many start-ups will set up a business bank account and put their beautiful new website live, ignorant. Then they will have their application for merchant services rejected. Unfortunately, businesses in travel cannot approach card acquiring as just another tick on their to-do list. 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 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 put this into context, travel is in the same category as diet companies or adult entertainment companies.
When a purchase over £100 is made by card, the merchant provider must 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. However, generally these will get more backlash from consumers. This is partially because travel is often considered a luxury for many consumers.
If the consumer felt there was any area within the package that was not fulfilled 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 others. Furthermore, if a travel business were to collapse, the merchant providers can be liable for refunding 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. For example, the agency or operator collapsing before a product is delivered.
In this way, being able to display to the merchant provider that these situations won’t fall on the merchant provider gives 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. They have a tendency to forego working with industries that they see as a potential avenue for losses. 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 added assurance. 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 in any event.
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. This helps mitigate the risk to the merchant provider, but we do more than just that.
The PTS trust account system is efficiently, transparently, and properly run to ensure complete security. We have independent trustees in charge of all payments going in and out of the trust account. Plus, a transparent and efficient software system. This allows PTS members to see and control everything without delays. The PTS team are then reconciling monies daily down to each individual booking. Altogether, 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.
So, if you would like to learn more about travel software support with PTS, please get in contact with one of PTS’ lovely staff members by calling 0207 190 9988. Or, you can visit our member support and travel trust account pages to learn more about how we protect you.
