Credit Card Processing For Travel Agencies

Credit Card Processing For Travel Agencies

Hello there , Welcome to the another post of , Today we are going to see Credit Card Processing For Travel Agencies. How you handle client payment information is one of the key touchpoints for legal risk if you work as a travel agent. Despite not being the actual travel service provider, you are still responsible for any payments you make to suppliers or handle yourself as the booking agent for hotels, resorts, tour operators, cruise lines, and airlines.

As far as credit card processors are concerned, travel-related firms are regarded as high-risk merchants. And as a result, they are among the business categories that are hardest to successfully apply for a merchant account. Experience shows that customers are amazing, which is the main justification. They have greater ability than most to contest and reverse charges made by travel agencies.

We’ll explore the two most common methods for travel consultants to pay for a client’s trip : –

  • Direct Payments : – Accepting payments directly from clients and paying suppliers later from the agency’s company bank account are two options.
  • Credit Card Authorization : – The second option is to use the customers’ credit cards to make payments using a PCI-compliant credit card processing system.

Make sure you have procedures in place to safeguard you in the event that a client disputes a charge with their bank because you can be responsible for paying the amount of the disputed charge.

Accepting Direct Payment from Clients

Direct client payments are accepted on a rare occasion, not on a regular basis. Why? Accepting money for tours, cruises, hotels & resorts, and airlines directly from customers carries a sizable level of legal risk.

Most host agencies forbid their customers from accepting payments for travel-related goods directly from passengers due to this inherent risk. There are two main justifications advisors might accept direct payments for travel from customers at agencies that don’t have that restriction : –

  • Rates : – Some companies purchase net rates from suppliers, mark them up, and then resell them to their customers.
  • Combining Payments from Various Suppliers : – In order to charge the client one price in a single transaction, agencies may combine payments from various suppliers and process the charge through their accounts.

Accepting money for tours, cruises, hotels & resorts, and airlines directly from customers carries a sizable level of legal risk.Depending on the policies, rules, and regulations of the credit card associations, your association may not actually be a Visa or MasterCard merchant. However, as a Visa and MasterCard merchant, the airline is governed by their policies. Be aware that, as part of the contractual arrangement, the airline transfers financial obligation in the majority of fraud-related transactions to the travel agency it has associated with. Your association will be fully responsible financially in such circumstances.

If you carry out either of these actions, you may be stepping into the realm of “tour operators” and you will undoubtedly expose yourself to further legal risk. If your agency engages in this practise, you should confirm that you are not going against any agreements you may have with your host agency, if any.

If you’re considering using Square or Paypal, reconsider. High-risk transactions are specifically excluded by the terms of service for such payment processors.

Since travel is regarded as a high-risk business, you’ll also want to make sure that you have a merchant account with a payment processor that is approved for high-risk charges. These merchant accounts can be expensive and challenging to obtain.

If you’re considering using Square or Paypal, reconsider. High-risk transactions are specifically excluded by the terms of service for such payment processors. You should also confirm that direct payments are permitted by your errors and omissions insurance.


A high-risk payment processor is not required to process charges for services or consulting fees.

Planning or service fees are not covered by the aforementioned restrictions on collecting direct payments. Fees are payments for professional services, not for the actual journey. To conduct a charge for fees, you don’t require a high-risk payment processor.

You might be permitted by your host to take direct fee payments. As long as you abide by the terms of your hosting agreement and Seller of Travel legislation, accepting direct payments for fees carries far less risk in terms of the law.

Accepting a direct payment for fees is entirely acceptable, and you should feel good about it. However, if you’re using your bank account to pay for tours, cruises, hotels, and plane tickets, that’s a different story, and you should be aware that you’re taking a big risk.


If you are a hosted advisor, it’s probably against the terms of your host agency’s contract for you to receive direct payments from customers (possibly with the limited exception of service fee payments.)

There’s a rationale behind that. You assume a lot of potential liability if a customer pays you through your bank account. Using your client’s credit card to pay a supplier directly is the most secure approach to pay a supplier. You’ll need a strong credit card authorization for that, and you’ll need one for each and every charge.

Using a Credit Card Authorization Form

Many advisors may accept an email authorisation or a credit card number over the phone. This is a problem, as you can see.

No matter how well you get along with your customers, you shouldn’t skimp when it comes to taking payment authorizations. Many financial advisors may accept a client’s email authorisation to charge their credit card or take their credit card number over the phone.

This is a problem, as you can see.

Your customer is effectively informing their bank that a payment you made with their card was fraudulent if they want to reject it. The provider will want evidence from you that you obtained the customer’s consent to use that card to make that charge in this situation. You risk having the amount of the disputed charge deducted from your account if you can’t convince the provider that you have the right to make the charge in the first place.

For this reason, you must obtain authorization before charging a client’s credit card in any way. The authorisation should achieve the following three goals : –

  • Include the authorisation date in the sentence.
  • Specify which card is being used.
  • Indicate the charge’s amount.

The credit card companies also mandate that the customer acknowledges and accepts the booking terms and conditions at the time of authorization and that the client is made aware of the cancellation and refund policies at the time of payment. You’ll need a credit card authorization statement for each transaction you make, even though that’s a lot of information to include in one.

Using a Tech Tool to Authorize Credit Cards

A excellent solution enables you to save a record of all client authorizations in your system and allows you to submit a detailed invoice for customer approval.

You should think about investing in a technology product that will make it simple for you to obtain authorizations because you will need to do so for each transaction you complete. Your customers will find it simple to approve those costs as a result.

A good technological solution enables you to save a record of all customer authorizations in your system and allows you to submit a detailed invoice for client approval.

To use those tools, you might need to pay a CRM platform subscription, but think of it as a business expense. You can protect yourself for much less money by paying $50 a month for a tool than by losing a credit card chargeback and having to foot the bill for $10,000 of your client’s vacation.

Make sure the technology you’re considering adheres to PCI (Payment Card Industry) data compliance guidelines. It is extremely unsafe to obtain a card number by email or, even worse, text messaging, or to keep a card number in an unencrypted spreadsheet or database.

Your customers could become the victims of identity theft if your unencrypted system for storing and holding numbers is breached, and you might end up having to spend a lot of money to comply with the regulations governing the clean-up following a data breach. Once more, purchasing a tech tool that complies with PCI is a no-brainer. My suggestion? Spend the money, become proficient with it, and use it regularly.

How Credit Card Processing Works

Terms and Conditions

  • Recall how we alluded to your terms and conditions while discussing the language used for credit card authorization? We may have put the waggon before the horse, but yet… Do you have a document outlining your terms and conditions? If not, now is the moment to implement anything.
  • Every trip you arrange for a client starts with your terms and conditions statement. When arranging travel on their behalf, you should require your clients to expressly accept your conditions – either as part of a client agreement, when authorising credit card payments, or both.
  • The terms and conditions you have in place will guard your company from a variety of legal hazards, including following government requirements, limiting your liability for supplier mistakes, informing customers about travel risks, and much more.
  • When it comes to chargebacks, one of the clauses you’ll want to include in your conditions is one where your client says they won’t challenge charges they’ve authorised, save in instances of fraud. Although you can’t stop a customer from challenging fraudulent charges, you don’t want to pay the amount of the charge out of your own wallet if they’ve given you permission to pay the supplier for their vacation.

A one-size-fits-all strategy won’t be as effective in a high-risk industry as one that is specifically tailored to your company’s needs.

You could (if necessary) take the matter to court to get back the money you lost if your clients approved of the clause in your terms sheet. Basically, you would have to provide the court with evidence of your conditions, the client’s agreement to those terms, the authorization for the charge, and the harm you suffered. It goes without saying that no one wants to find themselves in the position of having to litigate a customer, but if a client challenges a sizable charge to avoid a supplier policy they find objectionable, you shouldn’t have to foot the bill for that.

It’s time to create a well-written terms and conditions document if you don’t currently have one. There are a few generic documents and templates available, including some that you can buy. But I firmly believe that a one-size-fits-all strategy won’t be as effective in a high-risk market as one that is tailored to your company’s unique needs.

Businesses who work with school groups frequently will require slightly different phrases than those that specialise in adventure travel. Before you spend money on a generic contract, speak with a lawyer familiar with the travel and tourist sector to find out what steps would be necessary to fully safeguard your company. The lawyers in ASTA’s attorney referral network provide discounted prices and free consultations to the association’s members. Consider it an expense of doing business.

It Doesn’t Have to Be Scary

Selling travel involves a lot of risk, and a big part of that risk is how you handle your customers’ financial data. The good news is that if you refrain from accepting payments from customers directly, have a strong credit card authorization, utilise a PCI-Compliant tech solution, and have a carefully drafted terms and conditions agreement, all of that risk can be mitigated.


Do travel agents take credit cards?

Travel agents can take credit cards over the phone, in person, or online. If you’d like, you can also combine techniques. Customers have the option of making a deposit in person and then paying the remaining sum in full before their travel online.

How do travel agents process payments?

Direct Payments: Accepting payments from clients directly and paying suppliers from the agency’s business bank account are two options. Credit Card Authorization: The second option is to make payments using the clients’ credit cards using a PCI-compliant credit card processing system.

What is the process of Credit Card Processing For Travel Agencies?

The merchant gives the payment processor a batch of authorised authorizations. The card association receives the authorizations from the payment processor. They are sent to the issuing bank by the card association. The issuing bank charges a “interchange fee” and transfers the money to the merchant bank.

Can travel agents do payment plans?

If you want to pay for your vacation with a credit card, using a travel agent can result in significant discounts. Everyone has the option to pay in installments (a deposit and a final payment), regardless of credit history.

What percentage do travel agents take?

When host agencies collaborate with independently operating agencies, a commission level of 7% to 8% is generally accepted. Independent travel agents with commissions ranging from 90% to 100% are often large volume, seasoned agents that need little to no assistance from the host agency.

What is the purpose of credit card processing?

They safeguard the private information from unauthorised parties by securely transferring it between the issuing banks and the acquiring institutions. As vital information, such credit card details and PINs, transit through gateways to numerous other parties, security is essential to their operation.


So, in this article, we covered the Credit Card Processing For Travel Agencies . The primary focus of this post was on examining Credit Card Processing For Travel Agencies based on recent market news.

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