Your Boarding Pass to the Best Travel Merchant Account

Why acquirers treat travel as high risk

In travel, the customer pays today for something they receive weeks or months later. Until the trip happens, the acquirer carries the risk that it never does: if a travel business or its supplier fails, cardholders turn to their banks, and the acquirer has to cover those chargebacks whether or not it can recover the money.

Underwriters call this delivery risk and look at three things:

• How far ahead you take payment. A hotel charging at check-in carries little exposure. A tour operator selling next summer's packages carries a lot.
• Supplier failure. When an airline, hotel group or ground handler stops trading, your customers can lose services you have already been paid for, and the disputes land on your merchant account.
• Cancellations. Strikes, weather, schedule changes and travel restrictions all lead to refund requests and, when refunds are slow or unclear, chargebacks.

How long customers can dispute a booking

For most purchases the dispute window runs from the transaction date. For services delivered later, it can run from the travel date instead. Under Visa's rules for dispute condition 13.1 (merchandise or services not received), a dispute can be raised up to 120 days from the transaction processing date or from the last date the cardholder expected to receive the services, but not more than 540 days from the transaction processing date (Visa). A booking paid a year before departure can still be disputed months after the trip date. Mastercard sets its own time limits. Read chargebacks explained for how the process works.

Rolling reserves and delayed settlement

Because the exposure lasts until the trip is delivered, acquirers protect themselves in ways that affect your cash flow:

• Rolling reserve: a share of each settlement is held back for a set period, then released. See our rolling reserve guide.
• Delayed settlement: funds for future-dated bookings are held until the travel date or close to it, instead of being paid out soon after the sale.
• Exposure limits: a cap on the total value of undelivered bookings the acquirer will carry at any one time.

Terms depend on your booking window, refund history and financial strength, and showing that customer money is protected, for example through a trust account or insolvency cover, strengthens your position. Get the terms in writing before you sign.

Package travel rules: insolvency protection and ATOL

If you sell packages, the law already requires you to protect customer money, and underwriters will ask to see how.

• EU: under the Package Travel Directive (EU) 2015/2302, organisers must provide security for the refund of all payments made by travellers when services are not performed because of the organiser's insolvency, and for repatriation when transport is included. Each member state decides how that security is arranged.
• UK: a business selling flight-inclusive packages or flight-only trips to UK consumers needs its own ATOL from the Civil Aviation Authority, unless it is the airline or acts in an exempt capacity, such as an agent of an ATOL holder (CAA). Packages without flights still need insolvency protection under the Package Travel and Linked Travel Arrangements Regulations 2018.

Travel merchant category codes

Your MCC must describe what you actually sell. Processing package sales under a hotel code, or the other way round, can lead to scheme penalties and a closed account. More in our MCC codes guide.

3D Secure, stored cards and no-shows

Most online bookings paid with cards issued in the EEA or UK need strong customer authentication, usually through 3D Secure. When a payment is authenticated, liability for fraud chargebacks generally moves to the card issuer.

If you store a card to charge a balance, a cancellation fee or a no-show fee later, authenticate the customer when you save the card and show the charging terms clearly. The later charge can then be processed as a merchant-initiated transaction, which falls outside SCA. Keep proof that the customer accepted those terms.

Fraud patterns to watch

• Last-minute bookings with stolen cards, where the fraudster travels before the cardholder notices the charge.
• Traveller, cardholder and billing country that don't match, especially on one-way or same-day flights.
• Many bookings from one device or IP address using different cards, a sign of card testing.
• "Not as described" disputes raised after the trip has taken place.

Score bookings by lead time as well as value, and keep confirmations and check-in records to answer disputes.

Multi-currency pricing and settlement

Travel businesses often take payment in one currency and pay suppliers in another. Choose settlement currencies so you aren't converting money twice before paying a hotel or airline. If you offer dynamic currency conversion, the customer must be shown the choice clearly. See multi-currency payment processing and the cross-border payments guide.

Guides for travel merchants

• Choosing a travel merchant account provider
• Travel payment systems explained
• How to prevent chargebacks
• How to win chargeback disputes
• High-risk merchant accounts
• What you need to apply