High Risk CC Processor for TIMESHARES, ADVERTISING & RESALE, Timeshare Cancellation Relief litigation timeshare doc prep
Merchant Account for TIMESHARES, ADVERTISING & RESALE, Timeshare Cancellation/Relief/litigation/timeshare doc prep
One of the largest industries in the world is the travel and tourism industry. It contributes a lot to the global economy.
The economic impact of this industry is on transportations, accommodations, timeshare, and entertainment and to get the economic rewards more and more countries are getting into this business.
It is very appealing to take a vacation but this involves lots of costs. Be it flights, hotels or excursions this does make the bank nervous. The travel merchants that are a startup find it very difficult to get the financial institution’s to gamble in their business. This is because the banks think that this industry is very risky. There are the high ticket prices and cancellations and the timeshare industry also has a reputation for having large amounts of chargebacks.
What exactly are chargebacks?
Chargebacks are when the credit card company will demand a refund from the business because of fraudulent transactions. This is why many of the traditional banks do not want to deal with the business of a travel merchant account.
A virtual terminal is mandatory for any business that needs to take reservations on phone or online. They need to be able to accept Visa/Mastercard/Discover/Amex and other credit card payments. And when the banks do not help this business then the company has to depend on a processor to get the travel merchant account.
There are however institutions that specialize in high-risk merchant accounts such as the timeshare business. They offer tailor-made payment processing solutions that meet the needs of the merchants. All that the merchant has to do is to fill in the online application form to get approval. The company offers chargebacks as well as a gateway setup. They work with businesses of all sizes.
The timeshare industry has to accept credit cards in order to be in line with its competitors.
Documents needed to apply for a timeshare merchant account
All that the company has to do is to fill in the online application form. The application process will get streamlined if all the documents are in place.
Below is the list of some documents that should be produced:
A valid id issued by the government
A letter from the bank
A website that is secure and working
Three months recent bank statement
Three months of the processing statement
Social security number or employer identification number
A chargeback ratio that is below 2%
A website that is fully operational
Understand the underwriting process
A Startup/Business that is responsible and legal is more likely to get approval for a merchant account. When the underwriters evaluate the business they make sure to check that the company is built on a business model that is stable and that it does not engage in any form of illegal activity.
The underwriter will access the business based on its credit score, bank statement, credit card processing history and its website. This is done to check if the merchant has any negative balance account or any outstanding bills. If the merchant account has a high chargeback ratio then that too is a problem. The merchant website should also have aSSL that is secure as well as have a refund and privacy policies clearly stated on its website.
Those timeshare businesses that have enough capital saved, have satisfied their debts and bills and have a good credit history are more likely to get approval.
If these actions are taken, then it will help the merchant to get the approval of the merchant account without any restrictions. This includes no reserve rolling requirements and high volume processing cap.
Get high credits processing volume for your timeshare merchant account
The timeshares business is given with a monthly credit card processing volume cap. This means that the merchant is allowed to handle only some specific number of credit card transactions each month. This means that once that cap is reached then the merchant cannot take a credit card for any more purchases in that month. This keeps the business like the e-commerce business from operating.
The volume cap will not last forever. The timeshare merchant can ask for higher processing volume after three months’ time. In that time they need to prove that they having been paying their bills properly and also have low chargeback ratio.
Chargebacks are high in the timeshares industry
There are a number of reasons why merchants who are in the timeshare industry can be hit by chargeback. This includes the high price. Most of the services that are related to the timeshare business cost quite a few dollars.
Since the customer would be pre-paying for the services in advance this is why the travel merchants are a high risk. Also, there are many travel companies that end up in loss and fail to give the services. When the business shut down its operations suddenly they do not refund the service and ticket cost to the customers who have prepaid for them. This is why the merchant account provider would check the High Risk vs Low-Risk companies and charge fees accordingly.
How is the chargeback ratio calculated for a timeshare merchant
In order to calculate the chargeback ratio the number of transactions done is divided by the number of mothy transactions. For example, if a merchant has 100 transactions and has 4 chargebacks then the ratio is 4%. It does not matter what the amount of the chargeback is. What is important to the credit card processor is that the chargeback is kept low.
Merchant Accounts for time-share business
If you have a travel agency or are involved in timeshares then getting a merchant account that is suitable for what you need and can be challenging. The traditional banks will not offer their services to you because they are worried about the legal aspects and the risk involved in this business.
You can, however, locate a merchant account provider for your timeshare business. There are many who offer the high-risk business and provide processing services for advance sales.
The merchant service providers offer you domestic as well as offshore options. If you have a well-established business then it would be easier for you to get a domestic account. If your chargeback rates are controlled then you should not face any difficulty in getting a domestic account. However, if you are not qualified and face huge chargebacks then offshore accounts are your only bet. The offshore merchant accounts charge you more than the domestic ones.
If you are a new business then getting an offshore account would be almost impossible. In that case, you can look for a domestic account provider. If your business is not blacklisted then you should be able to get a merchant service provider.
It is important in this competitive business, that you let your customer pay online or make reservations on phone. Even if your timeshare business is classified under a high-risk business, you can look up for merchant account providers who are ready to provide services to your high-risk business.