Travel's high-risk classification stems from the advance-payment nature of the industry. Customers pay for trips, tours, hotel stays, and travel packages weeks or months before the service is delivered. If the travel provider fails to deliver the service, cancels the trip, or if external factors like weather or airline disruptions alter the experience, the customer's recourse through the card network is a chargeback. The advance-payment model means the chargeback window for travel transactions is longer than for almost any other retail category.
Traditional processors underwriting travel merchant accounts must hold reserves against this extended chargeback exposure, and the cost of maintaining those reserves reduces the profitability of serving travel merchants. Travel crypto payment processing through 27 Blockchain eliminates the chargeback mechanism, which removes the need for the extended reserves that make traditional travel processing economically unattractive for acquirers.
