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We are in the Online Travel Industry, for people who dont know the forward book and high possibility of cancellations (Chargebacks) makes travel regarded in th

We are in the Online Travel Industry, for people who dont know the forward book and high possibility of cancellations (Chargebacks) makes travel regarded in the same category as Adult Porn and Online Gambling sites in terms of risk. It has taken us 7 months to get a card merchant facility, the bonding and legal registration requirements alone for trading are pretty damn difficult within the UK so following this we were hit with little or no co-operation from Merchant facilities, despite holding an IATA bonded Licence, UK TTA Licence and ATOL Licence, literally no card acquirers would touch a new travel startup it really shed some light on the way the industry can make or break a business. Common conversations would start with..."what sector"...."online Travel"..."oh we dont like that..sorry"! If I were aware of the utter disdain towards travel companies worldwide from card merchant services then I certainly would not have gone into the sector. Suffice to say we eventually got our card acquirer 2 weeks ago after 7 months of applications!, we eventually tried 7 UK merchant services & high street banks, 7 offshore merchant services - Panama / Belize / Delaware / Amsterdam / Estonia / China / Cayman Islands and were not even entertained by Google Checkout / Paypal / Neteller!! Additionally to give you guys an idea, our margin is about 10-12% of the Total Transaction Value, on the two occasions we actually got to terms of business they wanted a 10% rolling reserve for 6months (our margin!!) and on top would require a rate of 5.5% on credit AND debit cards!! therefore for each transaction when charging the customer a 2% CC fee we would infact be losing 3.5%. A completely unworkable situation, in essence...we've seen your business plan and your financials and if you want to trade your gonna have to bootstrap and borrow for your first year at least!! Luckily we have managed to find an excellent company in Moneybookers who are very open to negotiation...terms started at 180 rolling reserve of 10%, we have negotiated down to 45 days and 3% Rolling Reserve and a credit card rate of 1.9% which given our margins is MUCH more workable!! Sorry if this sounds like an anti merchant rant but when i saw this topic I had to share the problems we have experienced, after finishing complete integration with 45 xml suppliers, building a custom platform and new social media elements for travel and obtaining every licence under the sun its literally been 7 months of uncertainty and hell while we have had a fully working site just sat there!! Rant over!! lol

spohlenz 18y ago
Can anyone explain the reason for these attitudes? Is it just because expected fraud rates for that particular industry are higher?
- mcdowall 18y ago
  Its not that the fraud rates are high but rather that if an airline or supplier in the chain fails then the credit card company are liable for the refund to the customer. The Risk lies with them. So for example XL Airways going bust earlier this year had a massive impact on the merchant service provider as where products werent sufficiently bonded the liability lay with them. In such a high value turnover industry I can understand the risk element to the credit card company, but you would assume that becoming a member of 3 required bodies with bonding in place would be adequate! Clearly not in 99% of the cases!
NeverGetBusted 18y ago
Great points! I agree with you about going offshore. Nothing is smarter than getting your business out of the country that used to be America. If the CC processors and politicians want to slouch towards Soviet Russia, because it's "safer", show them that not only will they not have the efforts of John Galt, they won't have the productive efforts of any online businesses to be profitable. If a salesman lies to you about ANYTHING in the TOS, don't proceed. ...They often think you're a rube who has no better "internet full of options". The arrogance I've encountered in my search was amazing. Sales people who tried to get me to sign a contract with hidden fees after telling me that "those are the flat rates". ...Circling vultures hoping I'd have no choice but to try to make it to their mudhole. Authorize.net, PayPal, and Google all have canceled my account (after first telling me there would be no problem, and then commending me on my sales volume and zero chargebacks), refusing to stand up for free speech, and instead falling back on their legal boilerplate when my political enemies (the free-speech-hating DEA) called them and threatened them. So much for free speech in the USA! When it comes to any speech that needs protecting, there is no freedom of speech, because it has to exist in an ocean of extra-constitutional tax-subsidized legal threats. Free speech only means something if there's someone brave enough to speak. In this case, the United States CC processors don't have that bravery. They are virtually all rank cowards. Jefferson, John Locke and Thomas Paine are rolling in their graves. If you get high, or you are a friend of freedom, then please, tell everyone you know to boycott google pay, authorize.net, and paypal. Boycott them, don't pay them, never give them a dime. Seriously. If you do support them, don't come crying to me when they open your records to the DEA or the tax man, or shut you down because somebody doesn't like what you're saying. In this case, my "sour grapes" aren't that I'm losing money, my "sour grapes" are that my beautiful free country was sold down the river for an idle threat. The best revenge you can get is check out my sites anyway, and if you like what you see, order by phone. Or come back when our offshote account is set up. http://www.kopbusters.com http://www.kopbusters.com http://www.nevergetbusted.com http://www.nevergetbusted.com

spohlenz 18y ago

Can anyone explain the reason for these attitudes? Is it just because expected fraud rates for that particular industry are higher?

mcdowall 18y ago
Its not that the fraud rates are high but rather that if an airline or supplier in the chain fails then the credit card company are liable for the refund to the customer. The Risk lies with them. So for example XL Airways going bust earlier this year had a massive impact on the merchant service provider as where products werent sufficiently bonded the liability lay with them. In such a high value turnover industry I can understand the risk element to the credit card company, but you would assume that becoming a member of 3 required bodies with bonding in place would be adequate! Clearly not in 99% of the cases!

NeverGetBusted 18y ago

Great points! I agree with you about going offshore. Nothing is smarter than getting your business out of the country that used to be America. If the CC processors and politicians want to slouch towards Soviet Russia, because it's "safer", show them that not only will they not have the efforts of John Galt, they won't have the productive efforts of any online businesses to be profitable. If a salesman lies to you about ANYTHING in the TOS, don't proceed. ...They often think you're a rube who has no better "internet full of options". The arrogance I've encountered in my search was amazing. Sales people who tried to get me to sign a contract with hidden fees after telling me that "those are the flat rates". ...Circling vultures hoping I'd have no choice but to try to make it to their mudhole. Authorize.net, PayPal, and Google all have canceled my account (after first telling me there would be no problem, and then commending me on my sales volume and zero chargebacks), refusing to stand up for free speech, and instead falling back on their legal boilerplate when my political enemies (the free-speech-hating DEA) called them and threatened them. So much for free speech in the USA! When it comes to any speech that needs protecting, there is no freedom of speech, because it has to exist in an ocean of extra-constitutional tax-subsidized legal threats. Free speech only means something if there's someone brave enough to speak. In this case, the United States CC processors don't have that bravery. They are virtually all rank cowards. Jefferson, John Locke and Thomas Paine are rolling in their graves. If you get high, or you are a friend of freedom, then please, tell everyone you know to boycott google pay, authorize.net, and paypal. Boycott them, don't pay them, never give them a dime. Seriously. If you do support them, don't come crying to me when they open your records to the DEA or the tax man, or shut you down because somebody doesn't like what you're saying. In this case, my "sour grapes" aren't that I'm losing money, my "sour grapes" are that my beautiful free country was sold down the river for an idle threat. The best revenge you can get is check out my sites anyway, and if you like what you see, order by phone. Or come back when our offshote account is set up. http://www.kopbusters.com http://www.kopbusters.com http://www.nevergetbusted.com http://www.nevergetbusted.com