More and more travel agents and tour operators are working in a card-not-present transaction that opens the door to travel agency credit card fraud. Travel Agencies are among the highest-risk merchants, as far as credit card processors are concerned. The reason is more likely the dispute and chargeback transactions.
So what should you do, whether you have just started your travel agency or have been in business for years to reduce risk?
First, understand the potential liability associated with selling airfares online before you even apply for a merchant account. Understanding risk exposure will help travel agency take adequate steps to minimize losses associated with chargebacks.
A good example is an airline sales agent. A travel agency or a tour operator merchant account may be liable for the entire amount of an airline ticket, if it is successfully disputed by a customer or if it was purchased with a stolen credit card.
To reduce risk, you will need to set up card acceptance policies and procedures to address the following issues:
- Authorization requests approved by an issuer. In most cases, airlines are liable for card-not-present transaction fraud, even when they were approved by the card issuer, because authorization approval is not a proof that the legitimate cardholder is making the purchase, nor is it a guarantee of payment.
- As a travel agency, your organization may not necessarily be a Visa or MasterCard merchant, subject to the Credit Card Associations’ rules and regulations. In most fraud-related transactions, the airline transfers liability to the travel agency it has partnered with as part of the contractual agreement. In such cases, your organization will bear the full financial responsibility.
Selecting a payment processor is a big step, choose one with experience in working with travel agencies and other high-risk merchants. Your processor must be able to assist you with your fraud prevention procedures.
Check out National Transaction Corp. we are the travel experts when it comes to electronic payments for travel agencies! Give us a call now at 888-996-2273 or visit us at www.nationaltransaction.com