Airline and jet charter services provide valuable travel solutions for people, yet fall into the “high risk” credit card processing category. There are several reasons why these types of services are considered high risk. To understand these, you must first have a general knowledge of various concepts related to credit card processing and airline and jet charter merchant accounts, as follows:
Airlines and Jet Charters Sell Future Services
When a plane ticket or charter flight is booked, it is often for a future period of time, typically at least a month in advance. As such, there is a lot that can, and does, go wrong between the time the payment is processed and paid to the airline and when the service is delivered. For example, the price of the flight decreases, so customers cancel their initial tickets, and rebook at the lower rate, resulting in chargebacks to the airline or charter service for the refunded amounts.
Airlines and Jet Charters Can Experience a Large Number of Chargebacks
For instance, someone might book and pay for a flight, and then cancel it within the allowed period of time because their travel plans changed or they found a cheaper flight through a competitor. This would result in a chargeback to the airline or charter service.
There Are Risks to Airline & Jet Charter Merchant Account Providers
The risks to credit card processing companies have to do with the high ticket amounts and volumes airlines and jet charters collect and what would happen if the airline or charter service went out of business. For example, an airline sells hundreds of thousands of dollars of tickets for flights 60 days in advance.
A week before the flights, what if the company goes out of business and cancels all of its flights? The people that paid with credit cards could request a refund through their card issuer. For the credit card processing company, this would be a nightmare because they would have to refund all that money, with the risk of not being able to collect it from the now defunct airline.
However, that does not mean that businesses cannot obtain airline and jet charter merchant accounts to process credit and debit card payments. It just means those transactions will cost more to process or could require specific conditions be met, such as funds being held in a reserve account and released once the flight occurs.
Keep in mind, these are just examples of potential requirements, depending on the credit card processing service you select, and they may not always be applicable.
Fortunately, here at Leap Payments, we understand these challenges and how not being able to process credit and debit payments could affect your business. Luckily for you, we are willing to work with you to develop an effective credit card processing solution for your customers and clients, as well as one that offers the most appropriate payment options to satisfy your business’s needs.
To learn more about our airline and jet charter merchant accounts, please feel free to contact one of our high risk specialists at (800) 993-6300 today to speak with a representative!
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