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Week 9

Week 9 for the filgo sub

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John Bryan Alcantara
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4 views

Week 9

Week 9 for the filgo sub

Uploaded by

John Bryan Alcantara
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 16

PERFORM HOTEL

PAYMENT PROCESSING
Learning outcome:
Use and update different
1.

hotel payments.
Introduction
Are you considering moving from a manual system to an automated
payment solution? Or switching your payment processing provider? Or
adding a payments solution to your PMS?

Whatever the reason, you recognize that payments are the lifeblood of
your business. Without revenue, you can’t maintain your property, pay
employees, or install that commercial wine dispenser you’ve always
wanted next to your desk.

And yet, every year, lodging businesses lose thousands of dollars due
to mismanagement of payments. Are you one of them? Would you
even know?
FIVE HOTEL PAYMENT TRENDS

When it comes to paying for goods and services, consumer behavior is changing
rapidly. The world is going digital, and the travel industry is no exception. While
the pandemic has accelerated the pace, the transformation started well before the
pandemic and will continue to evolve into the future.

Whether you operate a large or small hotel, a hostel, inn, or short-term rental, the
same is true – if you’re not keeping up with the industry trends, you’re losing
business to more savvy competitors.
FIVE HOTEL PAYMENT TRENDS

ONLINE IS THE NEW OFFLINE CONTACTLESS PAYMENTS THE NEW LUXURY?


AREN’T JUST A FAD CONVENIENCE
Online shopping is booming.
Ecommerce sales in the U.S. Contactless guest experiences in Forget private jets and champagne
increased by 39.1% in the first general and payments like tap, baths, convenience is the new
quarter of 2021 over the same scan, and mobile wallets, in must-have amenity. A 2020 survey
quarter in 2020, reaching a particular, have exploded in from the National Retail Federation
whopping $215 billion. That’s a lot popularity in recent years. It’s found that 97% of shoppers have
of Amazon deliveries. But it’s not nothing personal, but people want backed out of a purchase because
just retail, it’s travel too, and this is a to keep their distance these days. it was inconvenient to them. For
global trend. In 2020, 65% of A 2021 Skift survey found that hotel guests, convenience includes
worldwide sales in tourism and 50% of travelers hope to see being able to easily pay online or
travel were made online, according contactless payment options at in-person with their preferred
to Statista. That number is expected hotels once they start traveling method of payment — and not
to reach 72% by 2025. again. having to wait while a front desk
agent types in card details or
counts cash.
FIVE HOTEL PAYMENT TRENDS

CASH IS NO LONGER KING FRAUD AND CHARGEBACKS ARE


ON THE RISE
After a long reign, cash payments
have abdicated the throne, falling to All these new payment methods aren’t
20.5% of point-of-sale transactions without challenges, and that includes
in 2020 and expected to fall to an increase in hotel chargebacks and
12.7% by 2024, according to fraud. Fortunately, advances in
Worldpay. What’s the new king (or payment technology make it easier to
queen)? Debit cards. And not far prevent chargebacks and keep
behind in the line to succession are payment data more secure.
credit cards. That’s no surprise
considering that debit and credit
cards are widely accepted, quick and
easy to use, and payments are
automatic.
WHO ARE THE KEY PLAYERS IN HOTEL
PAYMENT PROCESSING?
Aside from guests and hotel operators, several other parties are involved in a typical credit card transaction:

•The issuing bank. This is the guest’s bank, which issued the credit card, approves (or declines) the
transaction, and transfers the payment.

•The receiving bank. This is the hotel’s bank, which receives the funds from the issuing bank and
deposits them into the hotel’s bank account.

•The payment network. This is an intermediary between the issuing bank and the receiving bank. The
big players are Visa, Mastercard, American Express, and Discover, but there are a number of local and
region-specific players as well, such as Alipay and WeChat in the Chinese market. E-wallets, like Apple
Pay and Google Pay are also becoming more popular.

•The payment processor. This is the provider of the hardware and software needed to process payment
transactions and facilitate the transfer of funds.

•The payment gateway. For online payments, this is the entity that collects credit card information and
transfers it securely to the payment processor.
WHAT ARE THE MAIN PAYMENT METHODS?
in the accommodation business the most popular payment methods
are:

• Debit card
• Credit card
• Cash
• Mobile wallet
• Virtual payment
HOW EXACTLY DOES HOTEL CREDIT
CARD PROCESSING WORK?
Typical credit card transaction at checkout in a hotel.

1.The guest presents her credit card to pay for room charges.

2.The employee asks the guest to tap or swipe her card on the
payment terminal.

3.The payment processor sends an electronic message to the


customer’s bank via the credit card network requesting
authorization for the charge.

4.The bank sends back an authorization code (or so it should for


payment security). The employee makes note of the code and
issues a receipt.

5.Meanwhile, the guest’s bank transfers the payment into the


hotel’s merchant account, which later deposits it into the hotel’s
bank account. Everyone is happy.
WHAT ARE THE MAIN PAYMENT
TRANSACTION TYPES?
•Card-present (CP) transactions occur when the customer and their credit card are
physically present at the business and pay by inserting their chip (and entering their PIN if
required) to complete the transaction.

•Card-not-present (CNP) transactions occur when customers are not physically present at
the business including online and MOTO (mail-order/telephone order) payments. A MOTO
transaction is when the customer provides card details and the employee enters them
manually or uses stored information.

•Contactless payments occur when customers are present but do not physically interact
with the payment terminal. The customer holds the card or smartphone (mobile wallet)
over the reader, and the encrypted information is transferred and securely read by the
payment device.
WHAT IS A MOBILE WALLET OR E-
WALLET?

A mobile or digital wallet is an


application like Apple Pay, Google Pay,
or Samsung Pay that stores payment
method information on a mobile device.
Users can make contactless payments
via mobile wallets by holding their
mobile device over the payment
terminal. By 2024, mobile wallets are
expected to comprise one-third of POS
transactions worldwide, according to
Worldpay.
WHAT IS A VIRTUAL CREDIT CARD?

A virtual credit card (VCC) is a temporary


credit card number issued by a bank,
allowing people and businesses to make
online payments without revealing actual
card details. OTAs like Booking.com and
Expedia often use VCCs to send payments to
hotels. VCCs are issued for a specific
transaction for a specific dollar amount.
What is the difference between
Point of Sale and Point of
Interaction?

Point of sale, or POS, refers to the place


where a payment transaction is processed,
such as a cash register or computer terminal.

Point of interaction, or POI, refers to a


payment device that “interacts” with the
cardholder’s card through a magnetic stripe,
chip, or mobile app.
WHAT IS THE DIFFERENCE BETWEEN
MAGSTRIPE AND SMART CHIP CARDS?
Credit cards with a magnetic stripe on the back
require the customer to sign the receipt to validate
the transaction. These cards are more vulnerable to
fraud because it is relatively easy to read and
replicate the information and create duplicate
cards. Because of this, card issuers have moved
away from producing credit cards that only have a
magstripe.

More secure technology is the EMV smart chip,


which is much more difficult to replicate and in
EMV which stands for
many instances requires the customer to enter a Europay, MasterCard,
private PIN code. and Visa
PERFORM HOTEL
PAYMENT PROCESSING
Learning outcome:
Use and update different
1.

hotel payments.

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