It is a well-known fact that charter flight operators are seen by some payment processors as business entities that work in the gray area, and that is why most conventional and mainstream payment service providers generally classify aviation as a high-risk industry. This is because of many reasons, but mainly because of large transaction volume, international complexity, and regulatory requirements around customer identity verification.
Most of the popular names that you have heard in the payment industry simply don’t have the infrastructure that can handle the compliance layer that aviation demands and this is especially true when cross-border payments are involved. When you’re processing $50,000 or more per charter flight, then it is quite normal for you to understand that standard e-commerce payment processors may hit their risk threshold, and almost immediately, they may put a freeze on your account or sometimes may also terminate the account.
The real issue here is not that aviation payment processing is inherently risky from a fraud perspective but it is that the traditional payment service providers sometimes don’t understand the regulatory framework and the operational complexity associated with this industry.
Charter operators require robust KYC, that is, know-your-customer verification, and this is especially important when they fly internationally or handle charter payments from corporate clients. Some payment processors may press the panic button when they see unfamiliar MCC codes, large per-transaction amounts, and complex customer verification requirements. They sometimes assume that dealing with a high-risk vertical, similar to crypto, adult content, or aviation, is a rough road. Basically some are not equipped to differentiate between legitimate aviation operators and problematic merchants.
Aviation companies can partner with acquiring banks and payment processors that specialize in supporting similar or other high-risk merchants. This means they should work with ISOs, that is, Independent Sales Organizations, that fully understand the aviation MCC codes and the regulatory environment around them and can efficiently structure your merchant account to reflect your actual risk profile.
You will need to provide proper documentation to the payment service provider that demonstrates your operational legitimacy. Along with that you will also have to share FAA certification and insurance policies that you have for your fleet and for the team members if available. You’ll also need to provide copy of the contract that your company signs with your customers. If you already have a processing history, then you can share the same as well. Bt sharing the processing history you will be able to get the upper hand when it comes to negotiating good rates with the provider.
The key here is to position your application in the most perfect way from day one, rather than trying to utilize any workaround method to bypass processor restrictions. High-risk merchant account providers are basically designed for the aviation industry, and they can offer solutions that many standard payment processors cannot. These solutions include a comprehensive payment orchestration system that can actually handle multi-currency transactions for international charters. They also provide a robust dispute resolution framework. In simple terms, they are payment processors that understand why your transaction pattern looks very different from a typical e-commerce business.
Basically, they are the payment processors for high-volume merchants like you and they usually do not work with businesses that sell products worth $5 or $10. Such payment processors will definitely ask for more documentation upfront. But remember, this comprehensive analysis will protect you. By providing all the required documents, you are creating a positive and legitimate image in front of the payment processor.
When you create your aviation payment processing strategy, you must think beyond a single merchant account. Most successful charter operators always maintain relationships with at least two to three acquiring partners. This is especially done to reduce the dependency on a single payment processor and to handle different transaction types such as flight bookings, fuel surcharges, and cancellation fees. When you implement the redundancy plan in your payment structure, you basically protect yourself from sudden account termination that can actually plague your presence in the aviation space.
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