Dear WuBookers, accepting different payment methods isn’t just a nice-to-have, it contributes to customer satisfaction, allowing guests to complete transactions using their preferred system. Furthermore, when payment processes are automated, property staff operations improve, and the risk of errors (or worse, subsequent disputes) is reduced. The benefits are numerous: let’s take a look at the most common, and expected, payment methods in the hospitality sector.

Hotel payment systems: how many are there, and what are they?

When a guest makes a reservation, regardless of the rate, several payment scenarios come into play. For example, they can pay directly on the hotel’s website using a credit card (including virtual cards) or a debit card, or via a digital wallet, if the technology integrated into the site allows it. Alternatively, the hotelier may decide to send a link, generated by the PMS, to secure the reservation and defer payment to a later time. It is, in fact, possible to make payments in person at check-in. Finally, if the reservation was made through an online agency, the transaction is likely to be handled directly by the OTA’s website.

These, broadly speaking, are the options available to guests and hoteliers, but the actual payment methods, that is, the tools, the “physical” means of payment, vary.

In addition to cash, in the hospitality sector the most common methods are cashless, i.e., electronic: credit or debit cards; mobile payment apps; bank transfers; online payment gateways. Each of these has its own characteristics and advantages; let’s look at them in detail.

Credit or Debit Card

Credit or debit cards can be used for physical payments (via a POS system, which stands for point of sale) or digital payments. This is a reliable method for both the guest and the hotelier, as it draws directly from the customer’s bank account.

In addition to the major players in the industry, such as VISA, Mastercard, American Express, and Discover, there are numerous other brands that are popular in specific regions of the world. If your clientele is international, you may encounter, for example:

• JCB (Japan Credit Bureau): a Japanese payment system widely used in Asia;
• UnionPay: a Chinese credit and debit card system accepted in many countries worldwide;
• Diners Club: a premium card made in the USA;
• Maestro: a debit card brand managed by Mastercard.

Very often, instead of debit or credit cards, prepaid cards are used, which are loaded with an amount determined by the owner. Although they are a secure payment method, prepaid cards offer hoteliers less certainty of receiving payment because the funds may not be sufficient to cover the transaction.

Mobile payment apps

Mobile payment apps such as Apple Pay (for iOS devices) and Google Wallet (for Android) are particularly popular among tech-savvy travelers. In line with the growing trend toward mobile-first solutions, this form of payment involves the user storing credit card information within the app. At the time of the transaction, simply hold the smartphone near the reader. The transfer of funds from the guest to the merchant occurs contactlessly (using NFC, or Near Field Communication) and is virtually instantaneous, as well as secure.

Bank Transfer

Bank transfer is also a direct payment method that protects both parties and eliminates the need to physically handle a card. Large transactions or group reservations are often made using this system. In Europe, the most common system is SEPA (Single Euro Payments Area): the single euro payments area that allows for cashless payments in euros via bank transfer and direct debit. It is important to note, however, that funds are not credited immediately and processing times can vary, taking up to 5 business days.

Online Payment Gateways

Online payment gateways streamline transactions by connecting hotel reservation systems to various payment methods. They provide a secure, encrypted environment for processing payments, thereby increasing guest confidence. Examples of payment gateways include Stripe Connect, MercadoPago, PayPal, Nexi, and Redsys.

Managing Card Not Present Payment Methods

When discussing payment methods, we mentioned the possibility of making a reservation online, meaning without the owner (or the credit card) being physically present at the property. This type of transaction is known as CNP (Card Not Present) and is subject to specific regulations designed to protect users and their banking data during online payments, thereby reducing the risk of fraud.

The European Payment Services Directive, also known as PSD2 (Payment Services Directive 2), has introduced new authentication and security standards for authorizing electronic banking transactions. One of these is the SCA system (Strong Customer Authentication), which requires additional verification of the cardholder’s identity through at least two of the following elements: password or PIN, mobile phone or hardware token, fingerprint, or facial recognition.

To ensure compliance with legal requirements, it is necessary to provide customers with secure and compliant payment systems, for example through PSD2-compatible payment gateways.

The End of MOTO Transactions?

Online channels are not the only ones where a CNP payment can occur. So-called MOTO transactions, an acronym for Mail Order Telephone Order, fall into this category.

It is not uncommon for card details to be communicated via email or telephone, or even in person, to the hotel operator so they can process the transaction (the traditional manual PAN). However, this is considered a high-risk method, because that same data could be lost or stolen, causing harm to both the customer and the hotelier.

Not only that, but if the payment is processed in the guest’s absence, the property exposes itself to potential disputes from the cardholder, who may dispute the payment and initiate a claim.

If you decide to proceed this way, it is therefore necessary to learn about the safeguards in place to prevent chargebacks (i.e., the reversal of the transaction) and adopt technological solutions that ensure the protection of sensitive customer data.

Certainly, current regulations and general trends are increasingly moving toward limiting manual PANs in favor of electronic payment methods.

Why should a hotel offer multiple payment methods?

Security for both hoteliers and guests is precisely one of the main reasons why a property should equip itself to offer as many alternatives as possible to its customers. Adopting verified methods makes the hotel more trustworthy in the eyes of those making reservations and guarantees its reliability. This is also linked to simplification thanks to proven tools or pre-registered data that streamline the payment process and make transactions much smoother for both parties.

Furthermore, today customers are increasingly accustomed to choosing how to pay for their online purchases: whether it’s e-commerce or delivery platforms, more and more sites offer multiple options to meet consumer preferences.

And when this happens, revenue can benefit too! Not only because more payment options are made available, but also because verified electronic systems reduce the risk of fraud and disputes, thus making the entire process more streamlined and faster.

How to Choose the Right Partner for Payment Management

Now that you know the main payment methods for hotels and why it’s beneficial to offer more than one, all that’s left is to figure out how to evaluate the best provider to manage them. Beyond the equipment strictly tied to each individual system (such as a POS terminal for in-house credit card payments), it’s important to have software capable of adequately supporting payment management.

Here are the essential aspects to consider when comparing similar solutions:

• multiple payment methods together: verify that the software supports multiple payment methods so you aren’t tied to a single procedure and miss out on revenue opportunities;
• Integration with your management software and other software: if payment management isn’t already integrated with your management software, ensure it can easily interface with all the software you use; otherwise, you risk having to constantly switch between systems, adding to your staff’s workload;
• Operational efficiency, measured by streamlined and comprehensive operations—from payment processing to monitoring and reporting;
• Support when needed: but what happens if something goes wrong? Customer service is another element to consider carefully when evaluating a technology provider, especially when dealing with such sensitive and potentially vulnerable procedures;
• Security and updates in accordance with cybersecurity standards: protocols for managing sensitive data must be guaranteed and updated to comply with the latest regulations in your country.

Zak for managing online reservations and payments

Zak, the PMS by WuBook for hotels, perfectly meets all these requirements and also offers various systems to streamline sales, payments, and peace of mind for hoteliers and guests. There are three main tools through which the property can process online payments: the booking engine, the channel manager, and the PMS.

Zak’s Booking Engine

The booking engine allows you to receive direct reservations from the hotel’s own channels (such as its website), eliminating intermediary costs; therefore, it is essential that it integrates various payment solutions.

This is the case with Zak’s Booking Engine, WuBook’s management software for hotels, vacation rentals, and B&Bs, which supports various payment gateways for online sales. At the time of a reservation on the property’s website, the online payment gateway authorizes the customer’s credit card details by applying SCA and charges the expected amount according to pre-set rules. This may be the full amount, a certain percentage, or a fixed rate. The hotel can also simply save the credit card profile with the booker’s authorization (always in accordance with data protection policies) to process it at checkout or if the guest does not show up.

Zak’s Channel Manager

The channel manager is essential for streamlining online reservations and, consequently, digital payments across other distribution channels as well. OTAs such as Booking.com and Airbnb offer users various payment models: the guest can choose, for example, to pay at the time of reservation or upon check-in. In the first case, the OTA immediately charges the customer’s credit card and, at the end of the stay, pays the agreed-upon amount to the property. Payment and customer information must be transferred securely and seamlessly from the portal to the hotel front desk (or vice versa for any cancellations and refunds): Zak’s Channel Manager automates the entire process.

If, on the other hand, the guest chooses to pay in person at the hotel, the hotel pays the commissions to the OTA after receiving payment from the guest.

Zak, the all-in-one PMS

The property management system (PMS) is also essential for streamlining online payment processing and ensuring compliance with international regulations. Zak by WuBook allows you to automate the entire process of collecting, storing, and reporting guest information in accordance with current security protocols.

Not only that, it is configured to work with the most popular payment gateways, supports payments in multiple currencies, and allows guests to perform self-check-in.

When a guest or hotel staff enters a new reservation, the PMS by WuBook generates a link that can be sent to the customer so they can enter the required payment details independently.

Furthermore, it is already integrated with the Booking Engine and Channel Manager: this way, all reservation and payment information is transmitted directly from the reservation source (whether it’s your website or an OTA) to the front desk, enabling centralized management.

Payment Guarantee Methods Offered by WuBook

Processing credit card data does not necessarily mean charging a fee, and each hotelier can decide to request different reservation guarantees.

WuBook offers 5 methods:

• Data Only: the guest is asked for their credit card details, but no amount is charged. Due to the aforementioned PSD2, this method is no longer sufficient as a guarantee in Europe, but it remains available for non-European customers, who are not subject to EU regulations;
• Charge Authorization: Zak requests the customer’s credit card details and authorization to charge the amount at a later time. At that point, the hotelier can process the charge before, during, or after the stay;
• Amount Hold: With this method, Zak asks the guest for permission to “hold” a certain amount. You can choose to hold the cost of the first night or only a portion of the entire reservation, either a fixed amount or a percentage. This is known as pre-authorization. The amount will be held only temporarily, depending on the payment gateway used;
• Payment: by enabling this method, the customer must make the payment immediately to confirm the reservation;
• Bank transfer: the guest will see the account details to which the transfer should be made. Once the payment is received, the hotelier must manually confirm the reservation.

In conclusion, there are many payment systems for the hospitality industry, and each has its own advantages and requirements: integrating them into your business can offer guests added convenience and lighten the workload for staff at the property. Provided, however, that they are managed optimally, from every perspective.