Payment processing for the travel industry is an ever-changing market. Businesses who offer travel services are constantly finding new ways to create travel packages and update their sales structure. For many, this means catering to different methods of payments.
Vacations are a luxury item and an elastic good when it comes to an economics perspective. This means customers have a choice in when and how they purchase vacations. As the economy fluctuates, it’s important to understand how consumer interests are changing.
Payment gateways for travel agencies are just as important as a merchant account. The gateway connects to your website and allows for a smooth flow of payments for customers that purchase services online. The gateway should integrate easily with your website builder and provide a seamless user experience.
Moreover, your travel agency payment gateway should have backend tracking capabilities. This will help you identify key transaction information. Fraud alerts, chargeback data, and a customer history are all part of the gateway/CRM connection. If you have a history of fraud or want extra security, be sure to look into chargeback prevention tools and fraud notifications. These features will help improve your merchant account reputation and increase profits as you decrease returned payments.
Corporate travel is an entirely separate industry from vacation planning. People who travel for work often have shorter notice and budgets to work with for scheduling their trip. As a corporate travel agent, your payments are more reliable and consistent, but can come with shorter notice.
Your travel merchant account should be equipped to handle large ticket purchases of multiple thousands of dollars. This is also called a high volume merchant account. Because travel and high ticket sales are both considered high risk by standard banks, you’ll want to work with a payment provider who can customize an account for your business type.
If you’re a startup that’s just beginning to reach out to the corporate audience to attract customers, you’ll quickly learn that each client can make a huge impact on your revenue. However, in order to process your first order, you’ll need to have a merchant account in place
As your business scales with both consistent sales and increased volume, you’ll gain more leverage to negotiate your payment processing rates. A good rule of thumb is to contact your merchant account provider before you approach your maximum volume threshold. For example, if your account is set up for $20,000 per month and you know you’ll have increased sales for the holidays, be sure to reach out to your agent to increase volume and ask for discounted rates.
Some payment processing fees are locked in place like credit card fees from the major companies – Visa, Mastercard, and American Express, but there are other fees such as price per transaction and overall percentage fees that you can negotiate. Moreover, there are creative ways to adjust the way you process in order to find discounts. These include batch processing discounts or switching your payment gateway to a better provider.
As a travel agency it is important to adapt to new trends in the payment space. For vacation planning and spending, many families save up their income each month in a vacation fund in order to finally purchase a large trip. Similarly, travel companies have taken note and introduced periodic payment models as a way for customers to afford their dream travel plans.
Paying in installments is one of the oldest types of transactions, however, only recently has this payment model grown as a standard in the travel industry. If you’re not set up with an installment billing plan, it’s time to get onboard. Accepting payments over time gives you the advantage of having predictable income. With a steady stream of payments, you can invest in growing your business or secure funds for dips in the industry.
Split payments are similar to installments, but come in larger quantities. For example, someone may want to split the bill for their trip with a large group of people who can enjoy a discount when paying together. Offering split payments is a great way to promote larger trips and guarantee more customers are traveling together.
Alternatively, individuals may want to pay for their time-off before they take their trip and after they return. This gives them security when it comes to cancellations. For example, if a certain flight is delayed and they miss an activity, they will have a fallback option to withhold payment for services that weren’t provided. Although this is bad news for the payment processor, adhering to this payment model still locks in the initial sale and helps you to reach a larger customer base.
Monthly payments in travel are a major trend in the travel agency industry. As a related business, timeshares pioneered this recurring-type payment model. But, for many new vacation shoppers, the appeal of steady budgeting and guaranteed vacation time has usurped the product space where time shares once thrived.
Monthly payments can be executed on your payment gateway integration. Within your portal you’ll have the option to offer this to customers, and you’ll also be able to track and manage who is making payments on time, and for how long. Rewarding your long-lasting customers is a great way to reduce attrition, and reaching out to previous customers gives you another way to increase sales.
Payment systems for travel agents offer new ways for travel businesses to organize their information. With POS systems or online gateways you can track leads, create calendars, and funnel prospective clients into workflows. Every step of the conversion cycle is key when it comes to reaching out to new customers, and following up on successful marketing promotions.
Your payment processor should work directly with a Customer Relationship Management tool or CRM. This multi-level integration will give you the edge and help you connect key data together. A payment system also shows you past transactions. Use that information to upsell existing clients or target audiences with an extra degree of precision.