In the dynamic world of hospitality, efficient payment processing is crucial for guest satisfaction and operational success. Hotels must navigate a complex landscape of payment methods to accommodate diverse guest preferences while also being conscientious of their own bottom line.
Payment processing for hotels, motels and B&Bs involves handling transactions initiated by guests for room bookings, amenities, dining and other services. The primary methods include credit and debit cards, mobile payments, and alternative payment solutions like digital wallets. However, credit and debit cards remain the cornerstone of payment processing in the hospitality industry.
Credit card processing plays a serious role in a hotel’s overall financial health. Swipe fees, which are incurred with each transaction processed by the operator’s bank, have doubled over the last decade, costing U.S merchants nearly $100 billion in 2022. The average credit card processing fee, is 2.24%, according to the Merchant Payments Coalition but can be as much as 3% of each transaction. These fees that need to be paid each month can create serious hiccups in a business’s revenue. Because of this, the industry has created different options for processing payments and addressing the swipe fees, each with its own pros and cons. It’s essential hotels, motels and B&Bs are aware of the different payment processing methods and technologies available to save money and improve their bottom lines.
Credit Card Advantages vs Disadvantages
Credit cards offer convenience and flexibility for guests, especially for those who are accustomed to using cards for transactions worldwide. One advantage of card payments is their widespread acceptance and familiarity, making them accessible to international travelers. Hotels can streamline operations by integrating card terminals with their property management systems (PMS), enabling seamless check-ins, check-outs, and room service charges.
However, card payments incur transaction fees, which can vary based on the card type, issuing bank and the payment processor a hotel works with. Hotels must balance these costs, as the fees rack up over time and can negatively affect a business’s bottom line. Last year, an estimated $72 billion in fees were paid by merchants, a significant amount of money draining from the business. Hotel operators lose hundreds of dollars each year due to payment mismanagement and unwanted fees due to choosing the wrong payment processor.
What to Look for in a Payment Processor
Choosing the right payment processor can be tricky, as chargebacks come in for hotelier owners and fees rack up. Establishing a transparent and trusting relationship with a third-party payment processor can ease the stress of financials. Choose features that meet the transaction needs that work well for your business and its guests.
- User-Friendly Payment Systems – Easy-to-use systems are crucial, especially for motels or B&Bs. These systems make daily tasks smoother and lower mistake rates. Find a processor that offers simple dashboards for tracking sales and managing stock in real-time, hundreds of integration and app options, and is user-friendly. With this accessibility, guests can feel a sense of ease, as will the hotelier because data and finances are streamlined and transparent.
- Affordability and Transparent Fees – Finding affordable services is critical for businesses. Opt for providers with clear prices to avoid hidden costs. A detailed cost breakdown for each transaction helps in accurate budgeting and prevents surprises.
- Mobile Payment Solutions – On-the-go options provide operational flexibility and convenience. Mobile payment solutions are a must in the digitizing world. The right payment processor will let owners take payments anywhere, adding flexibility and customer ease. These options fit today’s entrepreneurs’ busy lives, enabling smooth operations and meeting customer needs without a fixed stationary location.
- Strong Customer Service – Having strong, supportive customer service is a must when picking a payment processor to work with. Quick and helpful support keeps operations running smoothly and can help improve financial health.
Third-party payment processors provide hotels, motels and B&Bs with the expertise, infrastructure, and specialized services needed to manage payment transactions efficiently and follow industry standards and guest expectations. Hoteliers should review their current payment processor and monthly swipe fee invoice and consider upgrading their systems to find a method that will benefit their operations and be as simple as possible for guests.
