Travel businesses under threat due to bank clamp down
Travel businesses are being threatened after a shift in policy by the HSBC.
The bank is forcing companies to stump up tens of thousands of pounds as ‘security’ or risk losing their card processing facilities.
Companies are being given 60 days to come up with the cash, or their contracts will be terminated.
The move comes after the HSBC decided to classify the travel industry as ‘high risk’ due to recent high profile failures.
It is undertaking a review of all its travel clients, on a company by company basis.
Other banks have also recently toughened up their policies in relation to card processing.
ABTA marketing manager Michael Threlfall said it has been contacted by concerned members in the last few months.
He said Barclays Merchant Services and Streamline, the two largest players in this market, have also recently tightened their criteria, but to a lesser degree.
“HSBC seems to be by far the most punitive and has obviously decided to take a step back from the industry,” he said.
“After the banking crisis, they are imposing very punitive terms, presumably knowing that their customers will not be able to meet them.
“We are tying to educate the banks about the actual risk. The reality is that if agents are selling ATOL bonded packages, the risks are zero.
“We would advise agents to explain their business models to their banks, and if that doesn’t work, to shop around.”
ABTA has negotiated preferential rates with the Bank of Scotland for its members.
* Is your business being impacted by the HSBC review, or the actions of another bank? If so, contact us by clicking on ADD A COMMENT below.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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