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How to choose the best payment gateway for your tour and activity business

How to choose the best payment gateway for your tour and activity business

Oct 20, 2023
6 min read

This blog article has been written in collaboration with Laura Fres, Product Marketer at TrekkSoft.


Managing a tourism business can be very challenging since many key operations need full attention, and management of payments plays a crucial role in the company's success. Choosing the right payment gateway not only sets up your business for success but also ensures a smooth user experience for your customers. 

The question you might have is which payment method is best for travel and tourism businesses. As published by Statista Research Department: “A survey asked travelers worldwide about their comfort level with a series of payment methods to pay for trips in 2033. While 41 percent of respondents reported being comfortable with an online payment system like PayPal, just 26 percent of the sample mentioned a cryptocurrency payment format.”

In this post, we'll cover:

What are payment gateways?

In this blog post, we will explore the world of payment gateways, addressing your questions about their functionality and options. We will cover important factors to consider when deciding a payment gateway and provide an in-depth analysis of leading choices for tour and activity operators.

Payment gateways are essential components of the online payment process for tour and activity operators, as they facilitate secure and seamless transactions between customers and merchants. 

The gateways operate as intermediaries, ensuring that sensitive credit card information is safely transmitted and processed. Some popular payment gateways that cater to the needs of tour operators include Stripe, PayPal, Square, Braintree, and TrekkSoft. Each platform offers unique features tailored to the specific needs of the travel industry, allowing businesses to accept various payment methods while ensuring an effortless checkout experience for travelers. 

How does a payment gateway work? 

To better explain how it operates and why it's safe, this is the process of a payment gateway: 

  1. Customer selection: The customer picks a tour or activity.
  2. Booking and payment details. On the booking page, the customer enters the necessary details and credit card information.
  3. Encryption. Payment data is encrypted for secure transmission using SSL technology.
  4. Authorization request. Encrypted data is sent to the payment gateway, then to the bank/payment processor.
  5. Authorization from issuing bank. The processor contacts the customer's bank for approval.
  6. Approval or denial. The bank responds; if approved, the booking proceeds; if denied, it's rejected.
  7. Confirmation. Upon approval, both the tour operator and customer receive confirmation.
  8. Settlement. Funds are transferred from the customer's account to the tour operator after a few business days.

The payment gateway ensures that your client's payment information is secure, facilitates communication between the tour website and financial entities, and enables a successful and secure booking for the tour and activity.


7 important factors to consider when choosing a payment gateway

Security of payment details

Ensuring the security of your customer's payment information is of utmost importance. When evaluating potential payment gateways, it is essential to assess their track record in terms of security breaches. This involves thoroughly reviewing the history of security incidents, focusing on understanding their nature, impact, and how each gateway has responded to such incidents.

Also, prefer systems that comply with the Payment Card Industry Data Security Standard (PCI DSS) and Strong Customer Authentication (SCA) requirements, which add an extra layer of protection during transactions. 

PCI DSS (Payment Card Industry Data Security Standard) and SCA (Strong Customer Authentication) are essential security standards in the payment industry.

  • PCI DSS. Ensures secure handling of credit card data, so it builds customer trust, protects data, ensures legal compliance, and safeguards business reputation.
  • SCA. It adds an extra layer of security for online transactions by improving transaction security, ensuring compliance, protecting consumers, and adapting to technological advancements.


Pricing and transaction costs

Understanding transaction costs is key to managing your business's profitability. These costs can vary based on factors like the payment gateway you choose, your business location, and your customers' location. So, it's important to have a clear grasp of these costs and how they affect your profit margins.

To get started, do some research on market rates and how pricing is influenced by customer location. This will help you compare pricing plans based on your expected transaction volume and target customers, allowing you to choose the most suitable option for your business.

When evaluating pricing, don't just focus on the base cost. Pay attention to fee transparency, including setup fees, transaction fees, monthly charges, and extras like chargebacks, currency conversion fees, and integration costs. By understanding the complete pricing structure, you can make informed decisions.

Remember that the location factor is important too. Some payment gateways are specific to certain regions, potentially limiting your choices based on your business's location. Additionally, keep in mind that gateways may charge differently for local and international transactions due to currency conversion fees and varying banking regulations.


User experience for customers

An easy-to-use payment process can significantly enhance the customer booking experience. Consider checking mobile responsiveness for smooth transactions across devices. Also, look for customizable forms and diverse payment options catering to varied customer preferences and opt for user-friendly interfaces to simplify onboarding.

To learn more about building great user experience, read the basics to building a great tour operator and activity provider website.


Multiple currencies

When it comes to accommodating international customers, offering a variety of currency options can positively impact your business in many ways. For example, embracing payments in multiple currencies enables you to appeal to a broader global audience. As a result, travelers from all corners of the planet can effortlessly book your tours and activities without grappling with currency conversion—streamlining the booking process for them.

That said, it's essential to mention that handling currency conversions may incur additional fees. Payment gateways could levy a charge for this service, with fees potentially varying significantly. It's crucial to familiarize yourself with these conversion charges and calculate your actual revenue from international bookings accurately.


Payment methods available

Understanding the intricacies of payment methods is not just a matter of convenience; it's a strategic move that can significantly impact your revenue, customer satisfaction, and overall business growth. Now, which payment methods should you focus on? 


According to a Forbes poll, in 202353% of Americans prefer digital wallets over traditional payment methods, showcasing a significant shift in consumer behaviour." PayPal emerged as the most popular digital wallet, utilized by 69% of respondents, followed by Google Pay (56%), Apple Pay (53%), Samsung Pay (52%), Cash App (52%), and Venmo (49%).


Credit and debit card payments

Credit and debit card payments are facilitated via payment gateways, acting as intermediaries between businesses and customers' card companies. These methods have global acceptance, user-friendly interfaces, and a perceived sense of security to the user. However, they can include potentially high transaction fees, occasional security vulnerabilities, and limitations in expanding your customer base, especially for in-person transactions. 


Online bank transfers

Online bank transfers enable customers to make payments by transferring funds directly from their bank accounts to yours, bypassing the need for third-party intermediaries. This method offers enhanced security by mandating user authentication, reducing transaction fees, and ensuring immediate payments. However, its usage might be less common in certain regions, and the setup process can be time-consuming. Additionally, the effectiveness of online bank transfers depends on the availability and reliability of banks' online services.


E-wallets (e.g., Apple Pay, Google Pay, PayPal)

These digital wallets are popular among tech-savvy consumers and come with an added layer of security compared to credit cards. Mobile wallets allow tourists to carry out transactions using digital tokens stored securely on their smartphones. They are convenient for mobile technology enthusiasts, with enhanced security features such as biometric authentication and swift processing times. Yet, their availability can be limited depending on the location, and not all customers may possess compatible smartphones or devices.


Cryptocurrency payments

Cryptocurrencies (e.g., Bitcoin, Ethereum) are decentralized digital currencies enabling peer-to-peer transactions without intermediaries, including reduced transaction fees, customer anonymity, and immunity to variable exchange rates. Nonetheless, their market values are highly volatile, making them a risky investment. Additionally, their acceptability is limited compared to traditional methods, and legal and financial concerns in certain regions can pose challenges for businesses considering their adoption. 


Read three investments to consider when switching to a new booking system.


Holding time

Understanding holding time is crucial when selecting a payment gateway. It represents the time between the completion of a transaction and the availability of funds in your account. This can have a significant impact on your cash flow management. With our Payyo Payment Gateway, you have the flexibility to choose how often you wish to receive your payments, whether it's once per week or once per month.


Availability of customer support

Leveraging an effective and responsive support team can significantly enhance your payment processing experience, leading to optimized conversions. But, how do you measure its effectiveness?

  • Dive into customer reviews: Delve into customer reviews to gain valuable insights on their experiences. Reviews can provide a real-life snapshot of the support team's efficiency.
  • Evaluate self-help resources: The quality of self-help resources, like test documentation and knowledge bases, can be an indicator of how invested the company is in helping their clients.
  • Engage directly with support: Interact with the support team by asking questions. This can give you a real-time gauge of their responsiveness, enhancing your evaluation process.


Refund and dispute handling

Selecting a payment gateway with a well-defined approach to returns and disputes is crucial in maintaining a streamlined operation and keeping customers happy. By understanding your chosen provider's policies, you'll not only reduce the likelihood of fraudulent transactions and comply with legal requirements, but also improve your company's overall efficiency.


When searching for the ideal payment gateway, prioritize transparency and support. A provider like Payyo Payment Gateway offers complimentary dispute and chargeback handling, even liaising with banks on your behalf for customer refunds at no extra cost.


Make an informed decision by opting for a payment provider that aligns with your business needs and safeguards both you and your customers with clear, actionable guidelines.


Optimize your payment processing

Choosing the right payment gateway is not just a financial decision; it's a strategic one that can significantly impact your customer experience and, ultimately, your business's success. You can make an informed choice that aligns with your business goals by considering security, pricing, user experience, multiple currency support, and customer support.

Level up your payment processing with Payyo Payment Gateway! Experience smoother transactions, expand your global reach, and streamline your tour and activity operations.  Dive into the endless possibilities that Payyo offers by scheduling a demo and taking the first step towards refining your payment strategy. 


Get started with a free demo


Gabriela Cofre Torres
Posted by Gabriela Cofre Torres
Content writer with a background in customer success and sales, Gabriela enjoys exploring Latin America, reading, and DIY projects.
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