Travel Agencies Face Challenges With Payment Processing

Even in an increasingly internet driven world, travel agencies have remained an integral part of the travel industry. Once, the travel agent was the sole means of purchasing travel arrangements. Today, the Internet is saturated with outlets where the average person is able to make all their travel purchases without having to speak to a single person. Even with these changes to the business norms, many still want the service and personal touch associated with a travel agent. Over the last ten years, the travel industry as a whole has seen staggering growth. Revenue growth inevitably increases competition and the saturation of a market, travel being no different. The need for travel merchant account payment processing is a paramount concern for any travel agency trying to stay as competitive as possible.

Need For Travel Payment Processing

Because of the way the travel industry operates and the value of transactions involved, travel agencies fall into a high risk category. This high risk classification was designated to travel agencies because of certain things that occur on a higher than average basis. You may be asking yourself; What are these occurrences? See below:

Non-refundable Transactions

Numerous purchases made in the travel industry are non-refundable. This typically occurs for airlines and hotels. A tactic meant to dissuade customers from changing their reservations once the purchase as been made in hopes of not incurring chargebacks on the transaction. The risk of a customer wanting a refund is also increased by the fact that the time between purchase and delivery is typically high.

Extended Delivery of Product

With a longer period between purchase and delivery of the good or service, comes the inherent possibility of a cancellation or change in transaction. SiteMinder averages the global lead time of hotel purchase to be about 24 days. This leaves an extended period of time for alterations or outright cancellation. This opens the potential for a chargeback. Enough of them, will eventually damage your ability to process transactions.

High Value Ticket Transaction

Entrepreneur magazine reports that the average vacation cost for an individual to be about $1,145. Adding a high ticket value to the two previous potential issues, only increases the risk further. A vacation is typically a high value purchase. A flight, hotel, car and activities can really add up. A chargeback is bad in itself, but a chargeback at higher costs is even worse.

Historically High Chargeback Ratio

Travel agencies have historically high chargeback ratios because of the unfortunate combination of factors listed above. The time between purchase and delivery is a huge factor. Things can happen between the two dates that take a greater precedence over a trip. A car breaking down, a family emergency or any other type of negative life altering event will be at the forefront over a luxury.


Though the risk is high, and the potential challenges a travel agency faces can be daunting, with no risk, comes no reward.  The ability to travel has become increasingly accessible to just about anyone than ever before. Even with this high risk classification and potential hurdles, the need still exists for a travel agency to be able to process electronic transactions. The solution is a high risk merchant account service that is familiar with high risk industries. It is important to find a provider that is “Travel Friendly” and experienced in merchant account services for travel agencies. Additionally, one that has a high level of customer service and is able to provide the solutions needed to help avoid the potential obstacles that your travel agency will inevitably face.

Many thanks to Cristian Rowe for providing this valuable material. Cristian is a small business authority and entrepreneurial journalist and staff writer at


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