Travel Merchant Account

Merchant Accounts for the Travel Industry

In today’s technology-driven world, the travel and tourism industry is undergoing consistent evolution. Traditional travel agencies have transformed into online travel portals, now serving a larger customer base and offering a vastly improved inventory of travel products. For all businesses involved in the travel industry, it is crucial to accept payments swiftly and on time. This drives significant demand for travel merchant accounts. Travel businesses of all types, including travel agents, airlines, tour operators, and travel guides, all require robust merchant accounts.

What Is a Travel Merchant Account?

A travel merchant account is a specialized bank account that enables businesses in the travel industry to accept credit and debit card payments. This type of merchant account is designed to meet the needs of businesses operating in the travel sector. The merchant account comes with features like the ability to accept high-volume transactions, subscription payments, virtual terminals, in-flight payments, quick cancellation, quick refunds, and multi-currency processing.

Top Travel Niches That Require Merchant Accounts

The travel industry spans across a wide array of verticals, and each of these niches has its payment challenges and risk factors. By understanding these segments, you will be able to choose the right travel merchant account, which can be best suited for your business operations.

Online travel agencies (OTAs): These platforms handle thousands of bookings everyday across domestic and international markets. The key reasons that make this segment suitable for high-risk credit card processing are the high volume of transactions and refund sensitivity.

Airlines & Private Jet Charters: From budget carriers to luxury private jets, Airlines require multi-currency and high-ticket processing with fast settlement. Big ticket size and the risk of cancellation make this particular segment suitable for high-risk merchant accounts.

Cruise Lines and Yachting Companies: These businesses literally operate across international waters. Their bookings are large, their industry is seasonal, and the business model is prone to disputes if the trips are delayed or the weather has affected the service. They definitely need high-risk PSPs.

Adventure & Safari Tours: Such businesses are generally based in remote regions, and they accept payments online from customers in different countries that create the cross-border payment risk.

Corporate Travel & MICE (Meetings, Incentives, Conferences, Exhibitions): Corporate travel means high-value B2B payments. These are often invoiced or processed through virtual terminals, and Most of the time, it requires Level 3 data support and excellent chargeback resilience. Dedicated high-risk merchant accounts offer these capabilities.

Travel Bloggers & Influencers: Many bloggers and influencers have now started monetizing the content through affiliate travel booking engines, and they need flexible affiliate payouts and embedded payment solutions.

“Every journey begins with a single click; make sure that click is securely processed.”

Why Travel Businesses Need Specialized High-Risk Merchant Accounts

Sponsor banks and regular payment processors consider travel businesses to have high credit risk, and thus, business entities in the travel industry require specialized high-risk travel merchant accounts. Choosing the right merchant account can significantly impact how your travel business achieves its profitability. Here is the simple breakdown of how travel merchant accounts compare with traditional credit card processing options.

Risk of Chargebacks and Refunds:

The travel industry is known across the merchant acquiring space for attracting high chargebacks. Long lead times between booking and service delivery often lead to high cancellation rates. Travelers may raise disputes and ask for refunds for many reasons, including changes in travel plans, budget constraints, last-minute plan changes, health issues, socio-political reasons, and weather challenges.

Itinerary Changes:

The travel industry works on the concept of partnership and collaboration, and small itinerary changes may happen because of unavoidable circumstances. Unfortunately, these minor changes may upset customers, potentially leading to refund requests.

Potential for Fraud in Online Bookings:

Online flight and hotel bookings are common targets for fraudsters who attempt to use stolen credit cards or identities to make fake bookings. Later, these bookings are often disputed by the original cardholder.

Seasonal Fluctuations in Business Volume:

Another reason that makes travel a high-risk industry is the seasonal fluctuation in online bookings. This inconsistency creates credit risk and can attract heavy financial losses for merchant acquirers.

Flexible Cancellation Policies:

The travel industry has become extremely competitive, and thus travel companies are forced to offer flexible cancellation policies. Some customers abuse these policies, increasing the risk of financial loss.

Multiple Service Providers:

The dependence on multiple third-party providers (airlines, hotels, etc.) increases risk. For travel agents that sell complete packages, it’s a bigger challenge because if even one service provider fails to fulfill the commitment, the entire package experience can be ruined. Travel customers have high expectations and low tolerance.

“In travel, the path is never straight. Your payments shouldn’t hit roadblocks either.”

Most Important Features of Travel Merchant Accounts

Travel merchants have unique requirements, and it is important for the chosen merchant account to offer features that fulfill these needs. Here are the most important features, listed in order of importance:

High Approval Rates:

Travel merchants are well aware of their industry’s high-risk nature. No merchant likes sending applications and KYC documents to multiple providers only to receive an email stating that their application was not approved by the underwriters. A good processor understands the merchant’s frustration and only initiates full underwriting after a pre-approval.

Multi-Currency Support:

Global travel agencies cannot survive without accepting payments in multiple currencies. It is the second most important feature for travel merchants. With a multi-currency travel payment gateway, accepting payments in international currencies becomes extremely easy. Customers prefer making payments in their local currency.

Dynamic Currency Conversion:

The DCC feature extends the capabilities of multi-currency processing. Merchants don’t need to price each service differently in different currencies. The dynamic currency conversion utilizes real-time FX conversion rates and shows the calculated value in the native currency of the customer.

Fraud Prevention Tools:

AI-driven fraud reduction tools provide excellent defense against fake transactions. A good travel payment gateway checks various aspects of transactions, including the historical blacklist of the card, BIN validation, user IP, AVS, 3DS, card velocity, and many more. All these result in safe travel payment processing.

Chargeback Management:

Chargebacks and returns are common for travel merchants, making it vital to have a good chargeback management solution. In case of chargebacks, merchants have very little time to present their case. If the travel payment gateway comes with a quick chargeback management solution, the merchant’s ability to efficiently defend against fraudulent chargeback cases improves.

Recurring Billing Options:

Travel is a high-ticket industry. Many customers prefer to make purchases using subscriptions. The travel payment gateway must support subscription and installment payment methods. Merchants in the travel industry that offer features like subscriptions, zero-cost EMI, and buy now, pay later make more sales than those that only accept credit and debit cards.

Integration with Booking Systems:

Travel agents and companies use various software, including CRM, POS systems, inventory management, and booking platforms. The payment gateway must offer easy integration options for industry software.

24/7 Customer Support:

Round-the-clock support is crucial, as travel merchants may need immediate assistance with refunds and chargebacks.

Competitive Processing Rates:

The travel industry operates on very thin margins, which are also internally divided among many players. It becomes extremely important for travel merchants to choose providers that offer low-rate card processing.

Security Tips for Travel Merchants Accepting Online Payments

Online fraud is a growing challenge for all types of travel merchants. And here is how you can strengthen your payment gateway to avoid such instances.

3D Secure & AVS:

You should enable 3DS 2.0 and address verification system for all card-not-present transactions.

Geofencing & Velocity Rules:

Use intelligent tools that help you limit transactions based on factors such as IP geolocation and user behavior.

Device Fingerprinting:

You can use tools that help you to identify malicious devices that are known to store digital signatures during previous fraud attempts.

Customer Behavior Profiling:

You can add artificial intelligence-based software into your booking system that will help you to track abnormal booking patterns, such as overnight flights booked from mismatched IP addresses.

“In the world of digital travel, strong security is your strongest selling point.”

How to Reduce Chargebacks in the Travel Industry

Chargebacks are one of the biggest risks for travel businesses. Fortunately, there are certain strategies that can help you reduce these disputes significantly.

Transparent Policies:

You should clearly communicate with your customers about cancellations, refunds, and itinerary changes. You can do it by sending emails or updating information on your support portal or your website.

Descriptive Billing:

Make sure that your billing descriptor reflects your brand name or service clearly. Having a vague or confusing descriptor results in immediate chargebacks from customers when they are unable to recognize the charge.

Proof of Delivery:

Use confirmation emails, itineraries, signed waivers, or digital receipts to defend yourself against illegitimate chargebacks and disputes.

Follow-up Communications:

Be proactive in communication with your customers; send trip reminders and confirmations before the travel date. This reinforces the intent and reduces last-minute disputes.

Real-Time Alerts:

Work with payment processors that offer near real-time alerts so that you can resolve disputes before they escalate.

“The best way to fight chargebacks is to prevent them with clarity, transparency, and timing.”

Key Benefits of Using a Travel Merchant Account

The right travel merchant account can offer numerous benefits for your business operations. Adopting digital payments offers improved cash flow management. By allowing customers to make payments with their preferred credit and debit cards, merchants increase customer satisfaction. With a travel merchant account, the business operates 24/7 without any stoppage. Customers can visit the merchant website and select travel packages or book airline tickets from different time zones.

The digital movement of money from customers’ credit and debit cards to the merchant’s business bank account reduces the manual workforce required to handle cash transactions. It also reduces the possibility of manual errors while accepting cash transactions. Merchants get access to a detailed reporting system. By extracting daily, weekly, and monthly reports, merchants can easily identify the highest-selling packages and the lowest-selling packages. Based on this, they can make informed decisions and modify their sales strategy.

Types of Merchant Account Solutions for Travel Businesses

Online Travel Merchant Account for E-commerce Payments

An online travel merchant account is designed for travel companies and businesses that accept payments from customers over the internet, focusing on e-commerce-driven sales. This solution is widely used by OTAs, hotels, motels, amusement parks, airlines, private jets, and tour operators. Additionally, it supports integration with mobile apps through an e-commerce gateway.

The process for completing transactions on an online travel gateway is straightforward: Customers visit the merchant’s website, select their desired room/flight/package, and add items to their cart. Upon hitting the checkout button, a form pops up requesting card details. After the merchant submits the card details, the customer receives an order confirmation. E-commerce travel merchant accounts typically include APIs and pre-built plugins for easy integration.

Retail Travel Merchant Processing for Face-to-Face Transactions at Travel Agencies

Retail merchant processing involves using credit card terminals for face-to-face payments. These terminals can accept all types of credit cards, debit cards, QR code payments, and tap-and-pay payments. Brand-new terminals offer multiple connectivity options, including 4G, 5G, and Ethernet. The robust hardware and software of these terminals make them ideal for various travel companies. These terminals can be easily integrated with travel POS systems.

Mobile Payment Solutions for Travel Apps

With a majority of travelers now relying on smartphones for any travel company, mobile-friendly payment solutions are no longer an option; they’re actually the most essential element.

SDK Integrations:

We have SDKs for Android and IOS which will allow our merchants to add the payment processing capability to mobile apps. With our payment solution, in-app booking is smooth.

Wallet Support:

You will be able to accept wallet payments, such as Google Pay, Apple Pay, and Samsung Pay, as well as local wallets in certain countries.

Tokenized Transactions:

You can reduce the risk of payment fraud by storing the encrypted tokens instead of card data for repeat users.

Push Notification Billing:

With an advanced booking engine, you can send reminders to your customers via app notification, which helps in improving engagement and conversions.

“Your customer’s passport may be digital; make sure their payment journey is too.”

Travel Merchant Account for Crypto Payments

The adoption of cryptocurrency is growing among digital first-time travelers. For travel companies, crypto payments can become a valuable edge.

Key Benefits:

Merchants get instant settlement when they switch to crypto payments this reduces fraud, and most of the time there is absolutely no risk of chargebacks, making crypto a highly attractive payment instrument when it comes to high-ticket international travel bookings.

Supported Coins: Most of the Crypto payment gateway solutions that work for travel merchants support Bitcoin, Ethereum, USDT and other stable coins.

Integration: Travel websites can integrate Crypto payments by utilizing readymade plugins or APIs. As a matter of fact, integration is also possible with major booking platforms or websites built on WordPress and WooCommerce.

Volatility Management: Most payment processors offer instant conversion to fiat that is in US dollars, Euros, or British Pounds to eliminate the risk of Crypto price fluctuation.

“Crypto isn’t just for the tech elite; it’s the new passport for global payments.”

KYC & Compliance for Travel Merchant Account

Local and Global Compliance for Travel Payments

Remember, compliance is not just a regulatory formality, but it is the cornerstone of sustainable growth for all businesses in the travel sector. As payment processors are becoming more strict towards security, travel businesses must align with local as well as global rules to stay operational and trustworthy.

PCI DSS Compliance:

All payment processors in the travel industry must adhere to the payment card industry data security standard, also known as PCI DSS. This ensures that the cardholder data storage and transmission are handled as per the protocol.

AML & KYC Standards:

High-risk travel merchants generally need enhanced due diligence, which includes real-time verification of customers during onboarding.

IATA Certifications:

For businesses that sell flights, being IATA certified can help build trust in the industry and may reduce underwriting challenges.

Travel-Specific Addendums:

Most high-risk payment processors will require merchants to sign additional compliance terms that are specific to tourism-related services.

Here are key documents required for a travel merchant account:

• Business Registration: Certificate of incorporation or similar document
• Identification Proof: Copy of the driver’s license, passport, or any government-issued document displaying the name, address, and picture of all directors
• Bank Details: Either a letter from the merchant’s bank confirming the bank details or a voided check
• Domain Purchase Proof: For online payment solutions

“Compliance isn’t a cost; it’s the currency of trust in global travel.”

Application Process for Travel Merchant Account

The application process for a travel merchant account typically involves several steps. The first step is the initial inquiry. Usually, you’ll fill out a short inquiry form on the provider’s website with your name, phone number, and email address. It’s advisable to use your business email address. You can also include a short message with specific requirements. Once the provider receives these details, a travel payment processing expert will contact you and suggest solutions.

A set of KYC documents, including personal identification and business documents, will be required. These documents are mandatory for the underwriting of a travel merchant account. Your application will be reviewed by underwriters, and based on their understanding, they will either approve or decline your request for a travel merchant account.

Once your account is approved, you will receive details about API integration and ready-to-use plugins. If you need a retail credit card terminal for your travel agency, you will receive details about the installation process of the terminal. Support is typically available throughout the process.

Representative Use Cases: How QuadraPay Supports Travel Merchants

At QuadraPay, we support a wide range of travel merchants through our partnership with globally trusted merchant acquirers and payment gateway providers. Because of the agreements that we have with our merchants and PSP partners, we cannot publicly disclose specific merchant identities; however, the following are the best examples that represent common industries and demonstrate how our high-risk travel merchant account solutions can address real-world challenges.

Use Case 1: Online Travel Agency (OTA) Based in Europe

Challenge: The OTA faced frequent chargebacks and a high decline rate. This was happening during peak travel months due to last-minute cancellations and cardholder disputes.

QuadraPay Solution: We offered high-risk travel merchant accounts that included dynamic currency conversion, fraud filters, and 3D secure 2.0. These tools helped in enhancing the security of accounts and improving the approval ratio. We also offered a chargeback alert and notification service. It helped the merchant to reduce the credit risk.

Result: The OTA reported a measurable decrease in chargebacks and was able to improve global authorization rates, and it helped them scale confidently during high seasons.

Use Case 2: High-Ticket Luxury Tour Company in the Middle East

Challenge: Due to the high average transaction value and its international clientele, this luxury tour operator in Dubai was previously declined by traditional processors.

QuadraPay Solution: We were able to connect the luxury tour company with a payment service provider that offers travel-specific merchant accounts. The account was set up with the rolling reserve condition. The processing partner was able to handle large-volume B2B bookings because of its level 3 processing capability.

Result: The merchant was able to process high-value payments across multiple currencies. This helped them stabilize cash flow, and they were able to grow their direct sales without interaction.

FAQ Related to Various Aspects of Travel Credit Card Processing

How can I get a travel merchant account approved fast?

Use a pre-vetted provider like QuadraPay. Submit complete KYC and be transparent about services offered.

What’s the best payment method for travel bookings on mobile?

Mobile wallets like Apple Pay, Google Pay, or direct credit card through PCI-compliant gateways.

How do I accept international payments for group travel?

Use a travel merchant account with multi-currency support and dynamic currency conversion (DCC).

Can travel agents accept crypto payments legally?

Yes, in most countries. Use licensed crypto gateways and convert funds to fiat to reduce exposure.

Which are the best payment gateways for travel companies?

When a travel company wishes to accept credit and debit card payments, it needs two components: a merchant account provided by a payment facilitator or an acquiring bank and a payment gateway. The payment gateway functions as software infrastructure that facilitates transactions, handles security aspects, and validates transactions. It also routes traffic and manages responses throughout the payment network. Here are some recommended top payment gateways for travel companies:

Authorize.net Gateway:

This popular gateway is widely used by travel companies in the United States and Canada. Authorize.net offers industry-driven features and requires merchants to pay a monthly fee, as well as per-transaction and batch fees.

NMI Gateway:

Another popular choice for travel payment gateways is NMI. It provides cost-effective gateway services and includes value-added services such as recurring billing, fraud prevention, and eCheck/ACH processing. Merchants pay a monthly fee and transaction fees. If merchants wish to accept ACH, there are additional fees like return fees, ACH NOC fees, and late return fees.

SwipeSimple Gateway:

Designed for simplicity and affordability, SwipeSimple Payment Gateway offers highly competitive transaction fees and supports cash discounting and additional users.

USA ePay Gateway:

This gateway requires a one-time setup charge and a monthly fee. The pricing for USA ePay Gateway is highly competitive, making it an excellent contender for the position of best payment gateway for travel companies.

PayTrace Gateway:

PayTrace’s payment gateway is extremely popular among travel merchants due to its virtual terminal capabilities and level 3 processing. The gateway allows merchants to accept payments through MOTO (Mail Order/Telephone Order). Merchants can easily start using the solution by paying a one-time setup fee, a monthly fee for virtual terminal usage, a fixed transaction fee, and a small percentage for level 3 processing if needed. PayTrace also offers ACH processing for travel companies, providing ACH API access, which includes invoicing. For travel ACH payments, PayTrace supports recurring billing.

Fluid Pay Gateway:

The Fluid Pay Gateway is another excellent payment gateway that comes at extremely economical pricing. Merchants pay a monthly fee per processor configuration along with a per-transaction fee.

SlimCD Payment Gateway:

Provides payment processing functionalities with low per-transaction fees. It offers excellent solutions for accepting travel payments over desktop, mobile, and web.

Accept Blue Gateway:

This gateway comes with highly advanced features and is priced quite reasonably. There is a one-time setup fee and a monthly fee.

BiasPay Gateway:

BiasPay can be an excellent choice for merchants in the travel industry. The gateway has a low monthly fee and can be integrated with most acquirers in the USA.

It is important for travel merchants to first identify their unique requirements and then match these with the features offered by the above-listed payment gateways. This will help in making the right decision. The features and rates for the above-mentioned gateways can change. For detailed product information, feel free to send us an email.

How does credit card processing work for travel agencies?

When a customer makes a transaction on the travel website or at a retail travel credit card terminal, this information is securely passed to the payment gateway, which verifies the details. After evaluating the transaction details, the payment gateway forwards this information to the card issuer. The credit card issuing bank checks if the card has enough balance to cover the transaction and approves the transaction accordingly.

The credit line check result, whether approved or declined, is sent back to the merchant. The merchant receives the information that the transaction is approved, and the customer receives a receipt confirming the payment for the travel service.

How can travel agencies accept B2B payments?

The same solution works for B2B transactions. However, B2B transactions on travel merchant accounts are slightly more expensive than B2C transactions. The interchange cost on business-to-business cards is higher than on consumer cards.

What are some common challenges faced by travel companies in relation to merchant accounts?

One of the biggest challenges merchants in the travel industry face is high processing fees. It becomes extremely difficult for businesses to operate while paying elevated fees to credit card processors. Another commonly faced challenge by almost every travel company is strict and rigorous policies. Due to the nature of the business, underwriters take a long time and conduct in-depth evaluations before approving merchant accounts. This extra scrutiny sometimes demotivates merchants.

Some providers add a reserve requirement to the account, which means that the merchant either pays a fixed amount at the start of using the account or the merchant pays a percentage from each transaction. Although this amount comes back to the merchant after 180 days, it takes away a significant chunk of money that the merchant could use to expand the business.

Travel merchants are subject to regular compliance checks and may be asked to sign addendums to the original agreement. Most of the time, the modifications recommended by the merchant processor are influenced by the decisions of card schemes, government agencies, and central banks.

What are some best practices to manage a travel merchant account?

To maximize the benefits of a travel merchant account and reduce the risk of account shutdown or payment holds, merchants must consider the following best practices:

By clearly communicating the cancellation and refund policy with the customer, merchants can reduce the risk of chargebacks and refunds. It is equally important to ensure that the merchant retains records of all transactions and customer interactions. These simple communication documents can help merchants during chargeback disputes.

Regularly reviewing the pricing strategy also helps in reducing the risk of returns. It’s natural for customers to feel upset if they realize the same travel package is available from a different provider at a lower price. Optimizing pricing reduces this dissatisfaction among customers.

At QuadraPay, we strongly recommend that every travel merchant have at least two merchant accounts. These can be integrated into the same website, giving customers the option to choose any of these payment solutions. The immediate advantage for merchants is the splitting of transaction volume, which also reduces the risk of losing funds at the time of account closure or suspension.

Scale safely with our high-risk payment processing.

What is the future of payment processing in the travel industry?

The future of payment processing in the travel industry will see significant advancements driven by technological innovations and evolving consumer behavior patterns. Customers are increasingly favoring contactless mobile payments, utilizing mobile wallets and NFC technology to make payments without the need for physical credit cards.

Blockchain technology is also likely to play a pivotal role, enhancing security and efficiency in payment processing systems, including fraud detection. The integration of blockchain with artificial intelligence promises faster, more secure, and cost-effective travel payment solutions.

Furthermore, there is a growing potential for travel payment systems to integrate with IoT (Internet of Things). This integration could revolutionize the travel experience by enabling payments through IoT devices for automated check-ins, room access, and in-destination payments. These advancements are poised to transform how payments are processed and enhance convenience for travelers globally.