Become a Home Based
Travel Agent

Global Settlement Solutions and You
By: Tom Ogg

I was recently hosting a NACTA cruise seminar when our discussion evolved to charging service fees and how to collect them. I was shocked to find that most of the group on the ship did not understand the Internet settlement processes. Since global settlement is one of the factors changing travel distribution, I thought it would be interesting to explore the topic.

At one time, travel agents were primarily involved with the settlement process for airlines, tour companies and other travel suppliers. While an airline could take reservations over the telephone, they needed someone to document the sale (airline ticket) and process payment (settlement). This bode well for travel agents that were located throughout the United Sates in retail locations who could deal with the airline’s customers in a very efficient way. The then ATC (Air Traffic Conference) Area Bank Settlement Plan allowed for travel agents to settle their airline sales weekly by accounting for each airline ticket, PTA, MCO and other accountable documents and reporting them to their designated area bank for processing and distribution of funds to the validating carriers that had been sold.

Travel agents would file their “ATC Reports” every Tuesday and the ATC would distribute the funds to the validating carriers. Non-validating carriers that provided transportation on the ticket would then submit the flight coupons they collected from passengers to the validating airline for payment. At the time it was a very effective way for airlines to redistribute monies collected from airline ticket sales from travel agents and other miscellaneous sales reported through the area settlement plan.

When credit cards became widely available to the population of the United States and the airlines introduced e-tickets, the need for travel agents to document and settle a transaction diminished to a point where airlines found they could deal directly with their customers and moved in that direction. What was once a lucrative business for travel agents eroded to a point where airline commissions are now just a piece travel industry history.

Enter the Internet and Global settlement solutions. While the Internet reduced global markets down to a click away, settlement of international transactions became opportunity for a number of companies that had a vision of enabling consumers and businesses alike to be able to process financial business instantly, securely, inexpensively and across all major currency platforms. Several companies like 2CO.com, Xoom.com and even Google have developed  global settlement processes. But, for the sake of focus, PayPal.com is the platform we will explore.

Recently acquired by Ebay.com, PayPal.com offers a full range of global settlement service that enable a travel agent to transact commerce both as a payee and a merchant. Using PayPal.com a travel agent can issue payments globally across virtually all major currencies and also receive payments globally and across all major currencies. PayPal.com allows a travel agent to process small, medium and large transactions effortlessly and inexpensively and provides detailed documentation of each transaction.

If you do not have a PayPal account you should open one right now. Simply visit www.PayPal.com and create an account. It doesn’t cost anything to start an account and you can either use a credit card for payment or have your account tied to your business bank account. You can always select an optional form of payment on every transaction. PayPal is much safer than using your own credit card because your credit card number and information (or bank account and information) is never exposed to the seller. If you use your business bank account, PayPal will make a couple of nominal deposits into it just to make sure everything is working properly. In effect they are paying you to sign up.

Once your account is set up, all that you do to process a payment is go to PayPal.com, enter your user name and password, enter the e-mail that you want payment sent to and hit “Pay”. It is that easy. Of course, the payee must also have a PayPal account, but at this point virtually all suppliers do.

You can also set your account up to receive payment globally. By using the simple HTML code PayPal provides for free you can add payment buttons on your website that delivers your customers right to PayPal where they can pay you either with their PayPal account, or if they do not have one, with his or her credit card. PayPal processes VISA, MasterCard, American Express, Discover and most other recognized bank cards. If you want to have a client give you a Plan-To-Go deposit, he or she would simply click on your Pay button and supply the appropriate information for payment. Once they have paid, PayPal notifies you via e-mail of the transaction and you can then open your PayPal account and transfer the money from your PayPal account into your bank account.

You do not need to have a merchant account to accept credit cards, just a PayPal account. You do not need a secured server to transact business, just a PayPal account. If you would like to see a fully integrated PayPal merchant setup, visit www.HomeBasedTravelAgent.com and click on any of the “Buy Books” links on the site. All of the buttons and shopping cart are free tools from PayPal. The only time that I pay anything is when an order is processed. My costs average about 3% of sales, which is substantially less than when I used my bank merchant account.

Start participating in Global commerce today by opening your PayPal account.

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