It is a well-known fact that travel is considered a high-risk industry by PSPs, and this is because customers generally pay months before receiving the service. This type of situation creates elevated chargeback and refund exposure for the payment service providers.
When the underwriters review a travel business website, they basically look for evidence that the company is legitimate, has established transparency, and is also capable of delivering the services that they advertise. A travel merchant may face rejection if the website shows very little evidence of real business activities.
As per the experience of the team at QuadraPay, we have seen many merchants like that. Such merchants generally have very low or absolutely no measurable online traffic. They have no active social media presence and no customer reviews, and they also present very limited company information on their website.
They use stock or generic content on the website, which reduces customer and payment processor trust. Such websites also lack verifiable travel industry affiliations. Underwriters generally expect to see signs that indicate that the customers are actively engaging with the travel business and the business has some kind of credible operating history.
The website quality and the compliance issues can also create significant concerns for the underwriters. For example, if the policies are poorly written or they are copied or they are generic legal content, or if the website has inconsistent business information like a dummy address, like a John Doe address or a dummy phone number; missing terms and conditions; unclear refund policies; outdated pages; or broken links, or if, in any way, the content appears unprofessional. All of these can indicate to the underwriters that the business owner does not have adequate operational control, and that is why such business models may be perceived as very high risk by the underwriters, and such accounts are generally declined.
Another major factor is the inability to verify actual travel fulfillment. For example, if the merchant claims to offer flight tickets, hotels, cruises, yacht charter, and vacation packages but does not clearly disclose the supplier relationship, accreditation details, booking processes, customer support procedures, proof of travel industry participation, or relevant API connectivity with industry-recognized travel aggregators, then the payment processors and the merchant acquirers may question how the services are being delivered and whether the customers are protected.
It is important to know that ultimately the payment processor evaluates the total risk profile of a merchant. A combination of zero online visibility, absolutely no social proof, a very weak website, compliance, poor-quality legal documents, and very limited evidence of genuine business operation can certainly motivate underwriters to simply decline the application or request substantial additional due diligence before approval.
Merchant processors commonly decline travel websites due to specific red flags.
- No visible travel industry accreditation or memberships. No IATA certification
- Very generic About Us page content with no identifiable team members.
- Very limited business history and company credibility indicators.
- No visible customer reviews or testimonials. No TrustPilot page
- No active social media links. No Facebook or Instagram Links
- Generic photo gallery with very little proof of actual operations.
- Poorly drafted privacy policy, refund policy, and disclaimer content.
- Grammar, spelling, or formatting errors all these can be red flags.
- No references to properly processing card transactions. It creates data security concerns.
- Very limited transparency regarding travel suppliers and fulfillment partners. Global air ticket and hotel and cruise bookings can not happen immediately without direct integration. If a merchant does that, then it involves manual intervention, and that may raise security risks and delay in delivery.
- No clear evidence of online presence or consumer engagement. No Backlinks or No Citations. No Google my business page.
- Heavy reliance on phone and WhatsApp sales can increase card-not-present risk concerns.
- Travel services are offered without sufficient detail regarding licensing, accreditation, or booking authority.
For a payment processor or acquiring bank, all of the above listed signals do not automatically mean fraud, but they certainly display that the merchant has some kind of personal uncertainty attached to the business model. In any of the high-risk verticals, including travel, the uncertainty factor itself is generally off enough to trigger a decline decision.
If you are looking for a travel merchant account, then it’s important for you to understand the above-mentioned factors and optimize your website as well as business model as per the best industry practices. This will help you to increase the possibility of account approval and will also help you to get favorable commercial terms from the payment service provider.
QuadraPay offers travel merchant accounts in various countries and regions, including the US, Canada, the European Union, the European Economic Area, Australia, and Singapore. Apply now.
1 thought on “Why are some travel merchants declined by payment processors even if they have a website and claim to offer travel services?”
It is important to understand that the same underwriting logic also applies to skill competition and sweepstake merchants, and these two categories are always considered as high risk by payment processors and merchant acquirers.
At QuadraPay we recently reviewed a US-based sweepstakes and raffle platform, and we can say that it was a good example of the kind of red flags that underwriters usually look for in this industry.
The website of the merchant presented itself as a marketplace where the user can enter to win premium products. However, when we checked the entire website we found several concerns that were clearly visible.
The website had empty or thin category listings that means the platform actually showed multiple product categories, and these included electronics, collectibles, clothing, and transportation. However, the actual listings under these categories pretty much appeared to be very sparse or mostly absent.
The underwriters at our payment processing partner companies, they want to see real active inventory and a live marketplace. When such merchants display empty categories on their website, it signals a dormant or a placeholder business, and no payment service provider wishes to onboard such accounts.
Along with that, it is equally important that the merchant had absolutely no social media presence. The homepage had zero links to any profile on Facebook, Instagram, TikTok, or Twitter. For any platform that totally depends on community participation, winner announcement, if we see the absence of social media on such platforms, then it is a significant trust signal failure.
It is also important to know that on this merchant’s website, there was no visible winner history or proof of fulfillment. Talking specifically about sweepstakes merchants, they must demonstrate that past winners have actually received their prizes and when they do not publish the list of previous winners or they do not present any testimonials or any social media posts showing the fulfilled rewards, then it is for sure that the payment processors may not be able to verify that business actually delivers its promise.
On the website, we did not find any chargeback management transparency and that is another red flag. Raffle and sweepstake platforms they often receive disputes when the participants feel that the draw was not conducted in a fair manner and without a publicly verifiable random draw process, or third-party audit certification, or some kind of transparency disclosure, the chargeback exposure on the merchant account can become extremely high.
On the website, we were able to find generic About Us content with absolutely no information about the team members. The About Us page described the concept of business in a broad term, but it definitely did not mention any founders, team members, office address, or company registration details.
Underwriters at any of the high risk merchant account provider company are required to verify who is behind the business and whether the principals have got a clean processing history or not. On the same website, we were not able to find any terms and conditions page or refund policy page. Ideally, these should be visible on the homepage.
For any merchant processing credit card payments related to competition entries or any kind of product purchases, it is important to have clear refund and dispute resolution policies and such policies should be clearly visible at the prominent locations of the website. The absence of such policies is treated as a big compliance gap.
For skill competition, sweepstake, and raffle merchants in US, and UK that are looking forward to get approved for credit card payment processing, they must demonstrate real business operations, active consumer engagement, fully transparent prize fulfillment history, verifiable legal compliance, and a website that clearly communicates genuineness to both the customers and the underwriters.
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