Businesses face growing cost pressures from payment services providers seeking extra security, Travel Weekly’s Future of Travel Spring Forum heard.
Krystene Bousfield, head of debt recovery at Travlaw, said: “A lot of merchant services providers [MSPs] don’t take any comfort from a bond with the CAA or Abta. They are asking for a huge bond in addition, looking to cover themselves 100%. We’ve gone as far as seeing directors being asked for personal guarantees.”
Bousfield said: “I appreciate MSPs need to protect themselves. If there is a failure, claims often get pushed in their direction, but it’s another layer of pressure for clients.”
However, Chris Photi, head of travel and leisure at White Hart Associates, argued: “Nobody held a gun against MSPs’ heads to write the business. They’ve taken the rewards of the charges and now they find themselves with a huge issue and want to cover it.”
He said: “You have these conflicting stakeholders who all want to protect their piece. What we’re seeing more and more is ‘Sorry, find a new merchant acquirer.’ That is not easy. There are some alternatives, [but] obviously, they are setting up security which is going to be restrictive on liquidity.”
Adam Pennyfather, head of financial consulting at the Travel Trade Consultancy, said some businesses “don’t have the choice” of changing merchant facilities, arguing: “Some MSPs have served notice [and] clients have been forced to look at the market, but the terms are generally not favourable.”