Running a travel business is hard enough without having to deal with payment compliance.
Except… you can’t afford to ignore compliance any longer.
Travel merchant account regulations are getting stricter and chargebacks are spiking, threatening to freeze and even terminate payment processors from your business.
The good news? You can stay ahead of these problems before they start.
By understanding what compliance means for your travel business, and by taking action today, you’ll avoid expensive fines and ensure your payment processing can keep growing with you.
Let’s take a look at:
- Why travel merchant account compliance is more important than ever
- The biggest compliance challenges facing travel merchants today
- Key travel merchant account compliance requirements you need to follow
- How to build a travel merchant account compliance strategy that works
Why Travel Merchant Account Compliance Is Important
Travel merchant account compliance ensures your business can continue to accept payments.
Failure to comply could result in account terminations and frozen funds, along with being placed on industry blacklists that make processing payments nearly impossible. In fact, the travel industry has seen an 816% increase in chargebacks when compared to previous years.
Think about it… your travel business relies 100% on your ability to accept payments.
But a single compliance violation could take that ability away from you in an instant.
The True Cost of Non-Compliance
Let’s look at the consequences of ignoring travel merchant compliance…
Payment processors will shut your account down without notice or mercy. You will incur penalties that range anywhere from thousands to hundreds of thousands of dollars in fines. And if that’s not bad enough, you might get put on the MATCH list which makes it almost impossible to find a new payment processor that will work with you in the future.
Over 25,000 merchants were put on this list in 2024. You don’t want to be one of them.
The Biggest Travel Merchant Account Compliance Challenges
Travel businesses are subject to unique compliance challenges that other industries don’t experience.
The nature of the travel booking business creates an environment where chargebacks and compliance violations are more likely to occur.
Advanced payments. Customers have to pay for their travel service before it’s delivered. They may then cancel or change the plans for a number of reasons. Service failures and travel restrictions have been an issue especially in recent years, leading to higher cancellation rates and more disputes.
International transactions. Travel merchants often sell their services across state and even national borders, making them subject to multiple, complex regulatory frameworks.
Time delays. Customers may wait months before they make a purchase. Disputes and chargebacks can occur just as far after the booking was made.
Let’s dig into the most common challenges:
High Chargeback Rates
Chargebacks are travel merchant accounts’ worst enemy.
When customers dispute a charge, they might not be happy with the service, had to cancel plans, or don’t recognize the charge on their statement. All of these come back to the merchant.
Simple solutions can dramatically lower your risk, starting with an all-inclusive Travel Merchant Account Compliance Checklist that addresses all common issues.
PCI DSS Standards
PCI DSS 4.0 standards went fully enforceable starting March 2025, meaning even stricter standards for all merchants who accept or store card data.
Stronger authentication, more rigorous vulnerability management, and 24/7 continuous security monitoring requirements are a big part of the new standard. Travel merchants have to be even more vigilant because they often store customer data for future bookings.
International Compliance Laws
Selling travel services across borders subjects you to a variety of regulatory compliance laws.
GDPR rules in Europe, AML standards in the US, and other regional compliance laws depending on your customer’s location. Staying compliant means following all of these various rules.
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Essential Travel Merchant Account Compliance Requirements
Keeping your travel merchant account in good standing?
You need to nail these essential core compliance requirements.
Miss even one, and your entire ability to process payments can be put at risk.
Transparent Refund Policy
A clear refund policy that’s easy to find.
Exact details on your cancellation windows, refund timelines, and any associated fees should be listed. Post it clearly on your website, include it in your confirmation emails, and have your customers acknowledge it before booking.
A simple refund policy can prevent endless disputes and chargebacks.
Proper Billing Descriptors
Most travel merchants are guilty of this oversight…
Make sure the billing descriptor – the name that shows up on the customer’s credit card statement – matches your business name.
Customers who don’t recognize the name dispute the charge. Simple fix, use a descriptor that has your business name plus a customer service phone number.
Transaction Documentation
Record-keeping is a must.
Includes booking confirmations, customer communications, cancellation requests, and proof of service delivery. If a dispute arises, this documentation will support your case.
Secure storage of these records for at least two years is recommended.
Security Standards Compliance
Meeting current PCI DSS compliance standards is a must.
This includes encrypted transactions, secure storage of cardholder data, regular security audits, and employee training on data protection. Partnering with a payment gateway that is already PCI compliant is key.
Building A Travel Merchant Account Compliance Strategy
Want to protect your travel business?
You can build a strong compliance strategy by taking a methodical approach and by committing to ongoing diligence.
Start With A Compliance Audit
Audit your current setup against all compliance requirements.
Pinpoint where your current policies, procedures, and systems fall short. Review your refund policy, billing descriptors, security measures, and transaction records.
This will provide a roadmap for your compliance plan.
Invest in Fraud Prevention Tools
Fraud prevention is the first line of defense.
Utilize AVS, CVV checks, and 3D Secure for online transactions. Monitor for suspicious behavior like multiple bookings from one IP address.
It’s better to prevent fraud than deal with it after the fact.
Train Your Team
Make sure your team is trained on compliance topics.
Regular training and education ensures everyone knows how to handle customer data, process a refund correctly, and respond to customer disputes. Create a company culture that places compliance at the forefront of everything you do.
Choose The Right Payment Processor
Partner with a processor that specializes in high-risk travel accounts.
Travel merchants need the tools, support, and knowledge to stay compliant. They should be able to walk you through complex requirements and provide alerts and real-time solutions for you to proactively prevent chargebacks before they happen.
Leverage Chargeback Management Tools
Invest in tools that will help you proactively manage chargebacks.
Notifications for potential chargebacks before they occur give you a chance to address the issue directly with the customer, and often have them withdraw the chargeback request. These tools not only protect your account, but save you money in fees.
Monitor Your Compliance Status
Software that tracks compliance status in real-time is a great solution.
Automated chargeback ratio monitoring, suspicious transaction flagging, and PCI compliance are all features these tools offer. Take the guesswork out of managing travel merchant compliance.
Regularly Review Your Policies
Schedule quarterly reviews of all your policies and procedures.
Regulations and card network rules change, along with industry best practices. Make it a point to stay on top of current requirements through regular audits and reviews.
Keep Customers Informed
Inform customers of every step of the booking process.
Send confirmation emails as soon as possible, with reminders and follow-ups as the travel date approaches. Keep contact information visible and easy for customers to contact with questions.
Help your customers before they have a reason to complain.
Wrapping Things Up
Travel merchant account compliance isn’t as difficult as it might seem.
As long as you understand the requirements and implement sound policies, while also taking advantage of available tools, you can protect your ability to process payments. The key is to stay on top of everything before problems arise.
Audit your business to identify gaps, fix what you can, and put monitoring in place for the rest. Future you will thank you for it when your competitors are battling frozen accounts and you’re racking up profitable sales.
