The word in the office these days is “fees” – plan to go fees, cancellation fees, consultation fees – you name it, it’s been done or talked about somewhere. The general idea is that travel agencies need to develop additional revenue streams instead of being tied to a supplier’s commission structure, not only to increase revenue but to compensate for lost opportunities, especially when clients use our services and don’t book.
This has posed a problem for some – how should these fees be collected? The traditional way of thinking involved collecting a check from the client, especially if they were not local to the agency. This poses a number of problems, including the potential for bad checks, having to wait on a check to arrive at the agency, and further waiting for the check to clear the bank. Then, in the event the fee is refunded, that poses additional issues and costs to the agency as well.
It is my firm belief that in this day and age travel agencies need to embrace collecting fees by credit card. For the home-based agency, this poses a problem, as most merchant account providers decline to approve travel agencies as they are classified ‘high risk.’ In addition, most home-based agencies operate in a rather mobile environment, meeting clients away from the agency office space or while the agent is traveling themselves. Thankfully, several options are now available at little to no cost and with virtually no qualifying process, options that will allow the home-based agency to accept credit card payments for fees and other charges. There are four major players right now, summarized below.
Square: Square is the one that started it all, and I personally use them for my own fees. You are provided with a white square card scanning device that plugs into your mobile phone’s audio jack, and paired with a free smartphone app download, you are able to begin accepting credit card payments immediately. Square’s mobile app is extremely user friendly and intuitive – you don’t spend time starting at it trying to figure out what to do. The funds collected are deposited to your bank account within 24 hours, which is terrific turnaround. It’s compatible with Android, iPhone, and iPad. The biggest drawback to Square, which has caused problems for many users out there, is the lack of an efficient support system. You can contact the company via email, but there is no phone support, no live chat, no anything else. For some, this is acceptable; if it’s not, try one of the other services below. Also, many users have been caught unawares by the company’s seemingly random funds withholding policy – a Google search will help you find these complaints and understand them better than I can explain them here. For a swiped card, the cost is a flat 2.75% fee of the purchase price; manually keyed cards incur a 3.5% + $0.15 charge. www.square.com
Intuit GoPayment: GoPayment was developed by the makers of QuickBooks, a popular accounting software program. Their device is a bit bigger than Square’s but works the same way, only it’s designed to interface seamlessly with QuickBooks and QuickBooks Online. Intuit’s Pay As You Go program charges a flat 2.7% on swiped cards, and 3.7% on manually entered cards. You can cut those rates by one percentage point by opting instead for the Monthly program for $12.95 a month. However, the only real benefit to using GoPayment is the QuickBooks interface. www.gopayment.com
PayPal Here: PayPal Here was developed by PayPal, no real surprise there, to meet the needs of their customer base. It connects with your PayPal account, and the funds are available immediately if you have the PayPal Debit Mastercard. The PayPal Here mobile app allows you to accept electronic checks, issue electronic invoices, and record cash payments. It’s a good choice if you rely on PayPal for your fee processing. Like GoPayment, it’s a flat 2.7% fee for swiped cards, with manually keyed cards costing 3.5% + $0.15. https://www.paypal.com/webapps/mpp/credit-card-reader
PayAnywhere: Offered up by North American Bancard, PayAnywhere is backed by the company’s length of service – they began in 1992. The service is pretty much the same as others, with one major exception – it works with Blackberry devices, which others do not. They also provide 24/7 support in a variety of methods including live chat on their website. Their fees are 2.69% for swiped transactions, and 3.49% + $0.19 for keyed. www.payanywhere.com
It is important to understand that these are typically not good solutions for agencies that bundle their own product, like independent tours, and are looking for ways to accept credit card payments in larger amounts than a few hundred dollars per client. They’re also not ideal for users who do a large volume of business – all of these services have limits on how much they’ll process on a daily basis, and/or in a rolling time period. Any funds over that threshold is held by the company often for a period of thirty days before being released to the user – this is one way the services practice risk management. In time, with a proven positive track record, it is possible to increase or eliminate this threshold.
When considering which service would benefit you best, it is imperative that you actually read through the terms and conditions of each one. Yes, I know, NO ONE reads the terms and conditions on ANYTHING! But, they’ll spell out the fund withholding limits and all the other nitty gritty that you need to know to make an informed decision. Better to spend a little time reading through the terms and conditions than to get caught later on, funds withheld just when you need them the most.
Steve Cousino, ACC, CTA, LS is a six-year industry veteran and owner of Exclusive Events At Sea (http://www.exclusiveeventsatsea.com) and Journeys By Steve (http://www.journeysbysteve.com) with specializations in group cruising, individual ocean & river cruising, and personalized experiences in Europe, especially the British Isles. He can be reached at firstname.lastname@example.org.