A new broker says it has persuaded a select group of payment providers to freeze their rates to help travel firms who are facing tougher demands from merchant acquirers.
Payments4travel founder Wayne Maraj has forged partnerships to provide access to more than 200 acquirers and 120 alternative payment providers keen to support the trade as they try to recover from the impact of Covid-19.
Providers have pledged to freeze rates for at least two years and avoid demands of personal guarantees or rolling reserves from travel clients.
“It has taken a lot of convincing,” admitted Maraj, who set up Payments4travel a year ago as a trading name of his payment services consultancy Your Brand Ambassadors. The Payments4travel.com website is currently under development.
He said: “A lot of them are European based acquirers but they are all financially stable, approved by or in the process of being approved by the Financial Conduct Authority, and members of Mastercard and Visa. What I am trying to do is help the industry, to get the industry moving again.
“I have more providers coming on board that understand my requests and understand travel. They have used their best endeavours to offer all travel firms the same terms. We are looking at full long-term relationships. It’s not a price-led acquisition strategy.”
The move follows predictions of a “perfect storm” of financial pressures for agents and operators, with merchant acquirers’ demands for processing card payments increasing and some deciding to severe ties with the trade with little notice.
Agents and operators currently spend around 5% of revenue on payment providers, without which travel firms cannot trade.
Maraj said: “Over the course of the year merchant acquirers and payment providers have been increasing costs [for agents and operators] by requesting rolling reserves, cash deposits or personal guarantees – just to continue processing card payments. In the current environment, firms cannot afford to do that.
“In the last month I’ve had ten trade enquiries from companies that have been asked for a cash deposit [by payment providers]. If they cannot, they have to find another provider. This is on top of the uncertainty of whether they will be trading this year and is another headache for companies. They don’t need the hassle.”
Additional partnerships with a leading trust account provider and insurance intermediary will see the launch of new products for the trade to ease cashflow worries for the sector, he said.
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