The Whys and Hows of Travel Merchant Account Application

"HONG KONG, July 1 — With helicopters pumping out streams of red smoke and boats carrying giant red Chinese characters — and with demonstrators calling once again for the elusive goal of full democracy — Hong Kong marked on Sunday the 10th anniversary of its return by Britain to Chinese rule." Unfortunately, we weren't able to go to Hong Kong early this week. All Cathay Pacific flights were chock full of passengers excited to see the events (which were uneventful, by the way) and we didn't like risking money for sweepstakes seats. It's likely that some travelers may have booked flights earlier and canceled them for some reason too. We don't call it high risk merchant business for nothing.

WHY (NOT) APPLY FOR A TRAVEL MERCHANT ACCOUNT?
Yep. The reason why travel agencies are having a hard time finding high risk merchant account providers is obvious enough. Not only is there a high incidence of chargebacks in this timeshare advertising related business, it also very unreliable profit-wise when off-peak traveling season comes. Think of how much these agencies lose when people cancel their reservations or pay with fraudulent credit cards. But hey, no one can deny that when profit here comes during the summer (when people go on vacation), profit pours too. The losses are always offset by the gains.

HOW MAPs LOOK AT YOUR BUSINESS
I have mentioned in my earlier article "Insider Tricks to Successful Merchant Account Application" that applying for this type of account is never a dead end road. Applicants get accepted for different reasons. For a travel agency, the same factors apply. These include the:

1. business profile

2. personal credit of the owner

3. business lifespan

4. monthly processing volume

5. business solvency

6. processing history

7. fraud / chargebacks history

I won't put your hopes high and suddenly burst your bubble. It is extremely challenging to apply for a travel merchant account. And hardly will you get accepted if you file for it on a domestic bank. What's your option? Go offshore. Offshore merchant account providers not only cater to all types of high risk businesses, they also are very flexible when it comes to accepting many international currencies and payment methods. Travel agencies with poor credit rating may still apply, as they have a high acceptance rate.

WHAT ARE THE POSSIBILITIES?
But don't be fooled. Common sense will tell you that along with the benefits (have I mentioned tax reductions and very little government interference?), you also need to pay for a price. Some MAPs may charge from a few hundred to a thousand dollars just for a set up fee. Be brave and make your research. Not all high risk merchant account providers are unscrupulous. In fact, some of them may offer 5% transaction rates/fees instead of as much as 15% or more. They also provide 24/7 customer support and use the most state-of-the-art anti-fraud tools in the industry. Best of all, as soon as you get accepted, your business may start running in a day or two with sales pouring in in a matter of weeks.

If your travel agency is just a startup, there is no need to worry about getting declined for belonging in a Terminated Merchant File. And because you don't have much yet in terms of budget and sales, some high risk merchant account services ask for minimal volume caps or sometimes none at all. You should settle questions about shopping carts and daily/weekly/monthly statement reports with the offshore provider of your choice. Other MAPs even let you consider a back up merchant travel merchant account if your merchant facility is withdrawn.