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How To Secure A High Risk Merchant Account: A Quick Guide For Airlines And Travel Agencies

As an owner of a travel business like an airline or travel agency, you’re no stranger to handling so-called high-risk operations every day.

One of the main reasons banks and payment processors might see and categorize your business as “high risk” is the common issues with cancellations and chargebacks in the travel industry.

Consequently, getting a high-risk merchant account is a tightrope walk. No wonder banks worry about losing money from too many refunds or frauds that are common in your industry.

Why Is Getting a High-Risk Merchant Account So Difficult?

Getting a high-risk merchant account is far from easy simply because banks and payment processors perceive businesses classified as high-risk—like those with high chargeback rates—to carry a greater likelihood of financial losses. Additionally, the stringent regulatory compliance and fraud risks associated with these industries make financial institutions more hesitant to offer their services.

Securing a High-Risk Merchant Account for Airlines and Travel Agencies

Going through the process of securing a high risk merchant account for your airline or travel agency involves understanding the unique obstacles your industry needs to overcome cleverly and legally. Once you do that, it will help you take strategic steps to get your way around hang-ups.

5 Steps to Secure a High-Risk Merchant Account

Step 1: Assess your business. Understand why your business is high risk and prepare to address these concerns with potential processors. You can do that by highlighting your business strengths, including any fraud prevention measures you take daily.

Step No. 2: Research and select. Find payment processors specializing in high-risk merchant accounts and have experience with travel businesses. Remember to ask for their references and case studies, especially from similar companies.

Step No. 3: Prepare proper documentation. Have all necessary financial documents and records of chargeback history ready to show your dedication to managing risks. Honesty can lead to better terms for your high-risk merchant account.

Step 4: Be transparent with payment processing providers. Discuss openly with potential processors your business model, financial stability, and risk management strategies. For example, share how you use advanced booking and cancellation policies to minimize chargebacks. This will demonstrate your proactive approach to managing risks.

Step 5: Negotiate terms. Work with the processor to negotiate terms that are favorable to your business, including fees and contract details. Do not settle for the first offer—negotiate terms that benefit your business.

By taking these steps and focusing on how your airline or travel agency handles risks, you’ll significantly increase your chances of getting this much-desired high-risk merchant account that will help your business grow bigger and better. A suitable payment processor can help you overcome the barriers of being considered a high-risk business in the travel industry.

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