Many travel firms face a scramble to find payment providers as acquirers become more reluctant to back the sector during Covid, an expert has warned.
Toreson Lloyd, co-founder of payments platform Apexx Global, was speaking during TTG’s webinar “Building stronger, safer payment systems to face the challenges ahead”.
Lloyd warned some of the travel industry’s most prominent acquirers were ditching clients at very short notice.
“It’s definitely on a lot of people’s radars at the moment.”
Acquirers tended to specialise in certain sectors he said, “which is great because on one hand you get a lot of sector-specific advice”.
“On the other hand they have a real exposure to the industry and when an industry faces the kind of issues Covid has introduced to the travel sector, all of a sudden, they find that overexposure is an issue and they’ve got to start reducing their exposure.”
This lead to two reactions, he said. “One way is to pass that exposure back to the merchant by increasing the amount of collateral they hold or delaying settlements so that the merchant to the travel business isn’t receiving the funds for any bookings being made.
“The second way is to reduce the number of merchants they have in that sector. We are seeing this a lot at the moment. Travel merchants are being served notice often as short as 60 days and being told they have to find an alternative provider or risk being turned off.
“It does not leave a lot of time; there are a lot of people out there rightfully concerned about who is going to be processing their transactions next year.”
Apexx could provide access to 100-plus acquirers to spread the risk, he said. “It certainly increases your odds of finding an acquirer willing to work with you.”
The industry also has to grapple with the Stronger Customer Authentication (SCA) requirements for online payments. The SCA is part of the EU’s Payments Services Directive II:
“This should be on everybody’s radar,” Lloyd said.
The SCA requires customers paying for goods and services online to authenticate with two different safeguards such as a one-time password sent to a mobile phone or a fingerprint scan.
Lloyd said SCA would come into force in the UK in September 2021.
“It has already been postponed, but authorities are saying there will be no further delays, which may take a lot of people by surprise,” he said.
“There has certainly been a bit of a scramble over the last couple of months to make sure business are ready.
“Just make sure you are engaged with your acquirer, they should be supporting you on this. If they’re providing your gateway they should be communicating with you. If not, you need to be asking questions.”
The seminar also covered fraud protection, frictionless payments, and the benefits of working with a wider network of acquirers.
To watch the full 45-minute FREE seminar, register for the event to receive a URL and watch it on-demand.