International tour operator, Macs Adventure came to TTC during the Covid-19 pandemic. Founder and CEO, Neil Lapping had some offers on the table, but wanted help appraising them.View case study
The travel industry is a high-risk environment
If you accept card payments, you will need a merchant services provider or merchant acquirer to process your transactions.
Unfortunately, the travel industry has faced a lot of uncertainty over recent years. As a result, merchant acquirers often view travel companies as high risk, which they try to mitigate by asking for additional security, such as:
deferred settlement, meaning a delay in receiving your cash.
rolling reserve, and retention balances, typically resulting in cash being withheld by the acquirer.
other forms of financial protection or collateral.
The actions aren’t always justified.
These security requirements can have a major impact on your business and working capital. In the most severe cases, the negative impact on cash flow can be terminal.
Yet, despite the magnitude of the consequences, we often find merchant acquirers have misunderstood or misjudged their risk. In many cases, their security demands are disproportionate, unwarranted or have been incorrectly calculated.
Relationship issues can arise when the merchant acquirer is not appropriate for a business at your stage or size. Sometimes a particular merchant acquirer simply wants to exit the travel sector entirely.
Helping you manage your merchant acquirer relationships
With our insights, knowledge and relationships, we can support you with your merchant acquirer problems by:
Modelling how new security demands and rolling reserves will impact your cash flow.
Negotiating security options by clearly presenting financial forecasts to ensure you’re treated fairly.
Agreeing an extension to notice periods to remove the threat of time pressure from your decision-making process.
Sourcing a new acquirer or helping you partner with multiple acquirers, to help you diversify your risk, or enter a new territory.
What clients think of our finance work
We’ve worked with a wide range of clients over the years, from household names to brand new start-ups.
Here are what some of them had to say about our financial services.
"Knowing that the TTC team are finance experts who also have a deep understanding of the travel industry is the reason we have remained a client for so long. We are delighted with the day-to-day finance work and long-term strategic planning they have carried out for us."
"The TTC team were fantastic to work with, and they understood the travel industry as well as the challenges we were facing. Martin and Sarah shared some insightful analysis that, as a CEO, helped me to have confidence in the modelling and the decision I was making."
Latest finance work
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In this post we've identified four challenges and potential solutions to post-pandemic financial challenges the travel industry will face.