The industry of travel has been growing for a long time however have you wondered about the motive to this? One explanation is that our world is becoming ever more accessible since globalization has impacted almost every corner of the globe. It means that travel has become easier for the vast majority of people. Also, people are changing their attitude towards travelling as it’s not something that is considered a luxury anymore and the majority of people can take at least one trip out of the country per year. As demand increases as does the supply. As a result, we are seeing more and more travel and tourism services online.
WHAT COULD BE CONSIDERED A TRAVEL BUSINESS MERCHANT ?
Let’s begin by defining what is “travel business. In essence, it’s any online business that offers travel-related services or goods online.
The most popular travel business models include the following:
- Accommodation and vacation rental (hotel, apartment cabin, beach house, etc.)
- Car rental companies
- Cruise companies
- Transport (bus, rail, ferry, etc.) tickets
- Travel agencies
- Vacation packages
- City tours
Keep in mind that there may be different travel business models that aren’t included in the list above. If you’re not sure whether your model of business is supported Contact us.
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WHY TRAVEL INDUSTRY IS HIGH-RISK?
If you’re unfamiliar with online payments business you might be aware that travel is generally viewed as high-risk. The main reasons:
- There are a lot of cancelled reservations and orders. Travel-related cancellations are a common practice. Services frequently, regardless of regardless of whether it’s a hotel reservation or a city tour. The reason for cancellations is usually the individual’s decision. However some trips are cancelled because of a major force such as an earthquake, deadly virus or a flood, for example.
- The other reason may be due to the higher transaction value. The reason for this is obvious as high transaction values indicate a greater chance of chargebacks and fraud.
- The time period between the time of booking and the day of the service itself can be quite lengthy in the business of travel. This could be another reason as to why online travel companies are considered high-risk. The seller must be trustworthy to make sure that the service booked months ahead will be delivered.
- When customers are not happy Most of the time they’ll file for the chargeback, instead of requesting an exchange. This is because the majority of customers are unable to distinguish between the two. A higher number of chargebacks implies a greater risk.
HOW CAN TRAVEL BUSINESSES MINIMISE RISK AND PROTECT AGAINST CHARGEBACKS?
Every online companies should be aware of possible risks of selling online. We recommend that all online businesses adopt at a minimum the most basic fraud prevention measures. In addition, businesses that are at risk must be extra cautious and adopt additional measures to prevent fraud when required. Here are a few suggestions that can assist in preventing fraud and reduce the chance of chargebacks:
- Make sure you choose a payment provider. Make sure you choose a trusted institution that has a seasoned Risk Management Team. They can help you spot potential fraud before it occurs and will assist you in the event that you are confronted with an illegal transaction or chargeback.
- Integrate 3D Secure. It is essential for any highly-risk online business. It’s an additional stage in the payment process that confirms the authenticity of the purchaser.
- Always be aware of any all incoming transactions and watch out for any irregularities or suspicious signs.
- Check that your customer service team is always on hand to assist. If a customer needs to alter their order, or request an exchange, be available to help.
- Keep up with the latest news and latest developments in the fraud and payment prevention field. Merchant Stronghold blog could be the perfect place to start and we’ve prepared several informative posts on fraud prevention and chargebacks. All of which can be found on this page.
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The advent of online travel companies has made travel more convenient and accessible to the majority of the population. However, there are some inherent issues in this sector (such as the high transaction volume or huge cancellation rates) are high-risk. This means you have to put in place more measures to prevent fraud to avoid chargebacks and other issues.
If you own an online travel company and are searching for a payment provider that works in this sector. Get in touch with Merchant Stronghold.