High Risk Merchant Account for Timeshare Industries

What is a Timeshare?

Traveling as a hobby or as a means of relaxation has caught on with a lot of people today. More and more people are saving up their money to visit places around the world. But since, travelling involves a lot of money especially for your accommodation, timeshares are becoming a very popular option.

Timeshares in simple terms is a property or a resort jointly owned by many. You get to buy a holiday home that you get to use for a particular period of time in a year. The time when you are not using it, the other timeshare owners get to enjoy it. This is great especially if you like to go on a vacation every year.

Who is a timeshares resale or release/escape merchant?

With more and more people opting for timeshares, buying and selling of timeshares have also become a great business. Ultimately, there are timeshare merchants that sell, resell and advertise about timeshares just the way any other product is sold. So now you can simply go online and buy your timeshares property or even sell it through a timeshares merchant.

What is a Merchant account?

When you sell your products, you need what is called a merchant account. This is simply a temporary account into which all the money from your transactions will go into, before they can be deposited into your personal account. This also applies to online merchants, where customers pay for services or products using their credit or debit cards through payment gateways.

Why do you need a merchant account for your timeshares business?

As a timeshares merchant your business might involve selling of timeshares properties, or your business could simply involve advertising of timeshares or reselling of timeshares. Whatever it is that you are selling, when it comes to timeshares your customers will be from a variety of geographical locations. So in order for you to reach out to a lot of customers, it is essential to have an ecommerce website in place where people can do online transactions.

What is a high-risk business?

When you apply for a merchant account, your business will be analyzed to see if it is a high-risk business. The following are the reasons why your business might be considered high-risk.

• High level of chargebacks

• Returns and refunds

• Bad credit history

• A new business with little or no credit card processing history

• Your products involve high dollar transactions

• Your account was previously terminated due to a high chargeback

Is timeshares considered a high-risk business?

Timeshares, advertising and sale are considered high risk by banks due to a variety of reasons. Due to this, when you apply for a merchant account with a bank, your application can be rejected. Let us see the reasons that categorizes your timeshares business as high-risk

• Involves high-value transactions

• Transactions are typically completed over phone or internet and are considered as ‘Card not present’ transactions

• The industry is associated with high customer disputes

• Advance bookings are done causing a huge time difference between the time of selling and the actual delivery of products/services

• High probability of cancellations and refunds

Is your account denied/Shutoff/closed?

Your merchant account can also be denied or shutoff or closed for various reasons by major credit card processors like Paypal and FirstData. It could be because you as a business owner has a bad credit history. In case you have a tax liens, then too your merchant account can be considered high-risk and hence denied.

Being on the TMF list is another reason why your merchant account could be denied. This means that your merchant account has been placed in the Terminated Merchant file (TMF)because it was closed by a previous bank or merchant processor.

Is yours a Startup/New Business?

Another reason why your merchant account could be denied is because you are new in business. Any start-up company or new business too is considered high-risk due to the fact that there is no previous history of credit card processing.

Even if you happen to find a bank that will allow you to open a merchant account with them their rates vary by startup vs history. But in most cases, you may not have enough of a transaction history and might end up getting closed. A merchant service provider who has experience in managing startup merchant accounts is what you should look for.

Domestic & Offshore Options for your timeshare business

Another great option to consider for your new business or your high-risk business is an offshore merchant account. This is because, an offshore account has many more advantages than a domestic account. The differences between a domestic and offshore merchant account are shown below to highlight the advantages of an offshore account.

Timeshares merchant account providers

A timeshare merchant account provider is simply a bank or a payment processor that is friendly towards timeshare businesses. When you look for a merchant account provider for your high-risk business such as timeshares, look for the following features.

• Online application for merchant account

• No merchant services application fee

• Free payment account set-up

• Free virtual terminal set-up or payment gateway set-up

• Payment gateway should accept major credit cards such as Visa/Mastercard/Discover/Amex etc.

• Low or no monthly virtual terminal fee

• High merchant approval rate

• Both domestic and offshore account capabilities

• Allow high volume transactions

• Have multiple underwriting banks for high-risk businesses

In addition to the above, many other services are also offered by merchant service providers. Here are a couple of them that can be useful to your business

Electronic Check Processing/Drafting/ACH

Credit and debit cards are not the only forms of non-cash payments. Checks are also used as a mode of payment in more than 50% of the non-cash payment situations. Electronic check conversion makes your check processing much faster and reduces the hassle of paperwork.

Iphone/Droid Mobile Apps

Traditional card swiping machines require you to invest in a costly wireless terminal, but instead you can also make use of a mobile terminal. This uses a simple swipe terminal that can be plugged into any smartphone such as iPhones and Android phones. This method is especially useful for start-up businesses or for merchants whose accounts have been shut-off. You will be able to quickly start receiving payments and start accepting credit cards like Visa, Mastercard, Discover and Amex.