Small Fish Big Ocean

Helping specialist tour operators and activity providers with travel ecommerce

Merchant Services - is it just me or this a huge problem for small independents?

Firstly, I am very pleased to have found this website and the level of support it offers to players of all levels in the travel arena. I have been on the site many times and seen the amazing depth of help and advice on offer. Great concept, well delivered.

If I may just outline who we are before leading into my query as i suspect it is probably relevant,

I run a small, independent overseas property management business focusing specifically on Turkey with bases in Fethiye and Bodrum, two hugely popular holiday destinations. As a property management team, we have around 200 properties and growing, we have been slowly developing the market for self-catering rental accommodation for our clients, something we have been very successful in doing. We don't offer flights or any travel related services - just accommodation. We started working with independent travel agents in 2011 and this year we hope to expand this still further. Our systems enable agent login and we offer live availability which I think is a bonus for our agent partners. You can see our website here - Bodrum Villa Rentals (hope it OK to do this) - this is the front end to quiet a powerful management system for both our guests, agents and owner clients. Overall I think we are doing everything right as a small business trying to enter a heavily regulated market. 

My problem is, and always has been, taking money by card!! Our business is cash positive, has funds at the bank, no borrowings and no overdraft. We take money by paypal (which coincidentally people can pay using their credit cards), bank transfer and cheque. We have never had a customer default or a payment refused. Payments received from clients are held in a separate account and only distributed once the accommodation has been provided. Even so, we are having huge problems in securing a merchant card payment service which is driving me nuts!!

Having read several of the excellent posts on this forum I can see that there may be ways forward, perhaps supplier failure insurance or similar but I am unsure of my next step. I would be grateful for any help and advice from the members here as without a card payment system we aren't able to do what our clients want, take money at point of sale.

Thanks in advance for any help provided

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Are you based in the UK? Do you have to be?

e.g. if your main market is Turkey (rather than a bit in lots of countries) could you have a Turkish subsidiary or sister company. May be easier to get merchant facilities. So your UK operations act as a marketing arm but the card payments go into an account in Turkey.

Though if your agent business is significant, they will prefer to deal with a UK company. But at least they'll take the payment from the client and pay you money via bank transfer or cheque.

Hi Dee - Thanks for your speedy reply.

I am UK based, my teams work out of Fethiye and Bodrum. Yes, we have to be located in the UK - Turkey is a very difficult country to work in due to employment laws etc. It is also very expensive to run a business there. There are many other benefits to being UK based.

Our main market is Turkey but because we are very good at what we do, we are approached all the time to expand into other countries, I am currently dealing with an enquiry from Cyprus for example. 

We can take money in Turkey but the currency loss and fees make this somewhat expensive. Since our clients are predominately English and European it is better if we operate wholly out of the UK and then distribute funds to wherever as the majority will stay here in England. We also need to protect our clients, this is very important to us. The only way to do this is to control the majority of the funds received and then to manage the out-flows.

Although we are an extremely capable business the fact that we take deposits means that banks consider our clients to be at risk. I am trying to mitigate these risks by looking at bonds or insurances which provide added protection. We could of course look at the TTA but the vibe I get from this site is not giving me a warm feeling. I also saw something from an organisation called ABTOT but I am not sure who these guys are or if what they offer could be appropriate.

Don't know if what I have said here is helpful but I really do appreciate your comments.

Hello Dave,

I have experienced a similar problem when setting up as a tour operator in May 2011. Eventually I managed to obtain merchant services via Barclays but it came at a price! As they find new travel businesses high risk they will not realease funds for 45 days I negotiated this from 60 days.This can be renegotiated after 1 year of trading.Certainly not ideal but for us to be recognised as a bona fide operator we had to offer this service.However I have also signed up with Amex who operate through Barclays Merchant services and they pay within 4 working days. The charges are about 1% higher but it does ease the cash flow.

Good luck.


Hi all,

Very interesting and helpful advice.

We are in a similar situation. Our small tour operator is based in Cambodia where Pay Pal does not even operate has never been able to accept credit card payments which has meant we have lost several really big bookings due to the client not being able to pay by card unless here in person.

We are desperately trying to find a way round this but in Cambodia merchant services facilities simply do not exist.

Does anyone know if the TTA and other such organizations would let a non UK based tour operator join? Or would we need to be UK registered?

Are there any associations like this one operating on the international level?

Our other problem is getting adequate insurance and we are struggling to find an international insurer for a Cambodian based TO.

Any advice would be greatly received.



Hi Danielle,

Have you tried Skrill (formerly Moneybookers), no experience with them personally however it's a name that's cropped up occasionally, I believe it's somewhat similar to PayPal - they do list Cambodia as one of their supported countries.


Hi Paul,

Thanks for the advice, Ill look into this and see how we go.


Gosh Danielle - I thought I had problems!!

Have you looked at the google payment system - this might be more international. I did use it for a while but it basically the same as paypal and since I can and do use this it seemed pointless for me. It may however be useful to you as paypal are not worldwide. Sage also seem to have an offering for small businesses - I intend to look at this myself - but I suspect it won't cover Cambodia. Others wiser than me might like to comment.

I am trying to stay away from TTA for this business - it is overkill for us. My solution seems to be in looking at either joining a bonding organisation or taking out an insurance on every transaction which mitigates risk for the merchant bank - or both!! 

Lesley, thank you so much for your comment. I actually tried this route with Lloyds TSB - again though they hated the pre payments and they demanded a "set aside" of £20,000 into a side account as a bond. My guess is that would have solved the problem for us and while I could do that it would impact on cash flow. I think paypal virtual terminal works on the principal you are outlining - a 60 day or similar period before they transfer funds. I looked at this as well!!

While I fully agree that risk is a major issue here, we are talking about typical sums of around £350 per transaction (we only provide accommodation). All funds we receive in this way are separated out from business transactions so effectively we have a large pot of money available to meet the odd few chargebacks - we have never had any by the way - or refunds. I would say that each £350 transaction is covered by some £60K in the bank at any one time - tell me where the risk is to the merchant bank in all of this?? 

The banks it would seem are unable to manage their own businesses yet they feel fully qualified to manage ours!!

Google Checkout exclude a lot of travel businesses from their merchant services.

Thanks for the the advice, Ill check out Google and let you know how we get on.




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