Navigating payments: 6 best practices to prevent fraud & increase guest satisfaction

The hospitality industry has unique challenges when it comes to payments. From an increased risk of fraud and chargebacks to managing a host of currencies and payment methods, lodging operators need to ensure they have the right systems and processes in place to effectively process transactions.

To be successful at payments, you must identify how to make the guest experience as seamless as possible while reducing manual work and reconciliation and implementing fraud prevention measures.

Here, we look at 6 best practices to help you streamline transactions, protect your property, and deliver the ultimate payment experience to guests.

Common payment methods

The world of payment methods is constantly evolving, especially as more transactions occur via credit cards and digital wallets. Leading the charge toward a cashless society are Gen Z and Millenials, who are increasingly using digital forms of payment like Apple and Google Pay.

To entice these guests to book and provide a frictionless payment experience, lodging operators must offer the flexibility and convenience of multiple payment methods.

Today, popular payment methods include:

• Debit cards
• Credit cards (Visa, Mastercard, American Express)
• Digital wallets (Apply Pay, Google Pay, Samsung Pay)
• Virtual credit cards
• Buy now, pay later (Affirm, Afterpay, Klarna)
• Pay by Link

Modern hospitality payment solutions can help lodging operators accept a wide range of payment methods across different sources like your website or social channels via booking engine, OTAs, SMS, WhatsApp, and front desk terminal.

6 best practices for hotel payments

If you’re looking for ways to optimize your existing payment processes, here are a few best practices to follow.

1. Clearly list and disclose your policies

To help reduce chargebacks (and unhappy guests), ensure you clearly list all of your policies on your website. This includes your cancellation, refund, and no-show policies. As an extra precaution, it’s always a good idea to have guests check a box at booking, agreeing that they have read and understand your terms.

2. Ensure your billing descriptor includes your hotel name

An unrecognizable charge on a guest's credit card can raise alarms and result in a conversation with their bank. To avoid this issue, make sure the billing description on guests' credit card statements is easily identifiable. The same goes for any other services you may offer at your property, including a coworking facility, cafe, or spa.

3. Keep documents organized

In case of chargebacks, ensure that you keep clear documentation of guest authorizations to aid in a rebuttal. This includes sales receipts, any correspondence you have with guests (via email, SMS, messaging apps), signed registration cards, etc. With this information, you will have a better chance of reversing chargebacks.

4. Run and review reports on a regular basis

You and your payments provider should work in tandem to review payments and reports for any discrepancies or suspicious activity. Look out for unusually large purchases, and be sure to set up automation to authorize credit cards for guests when charges exceed the originally approved amount.

5. Prioritize risk management

Unfortunately, fraud is prevalent in the hotel industry. Prioritize a payment solution that is PCI-certified and fully compliant with SCA, P2D2, and 3DS regulations to protect yourself from fraud and data breaches.

6. Work with a hospitality-focused payments provider

Many companies offer payment solutions; however, only a select few come with a  deep background in the hospitality industry, which is invaluable for lodging operators. With a hospitality-focused solution, you can be sure your system was designed with hotel payment best practices in mind, like international payments, multi-currency, robust reporting, and more. Additionally, your support team will be better equipped to detect fraud and prevent chargebacks as they will have more familiarity with common use cases.

Advantages of a hospitality-focused payment solution

Technology plays a crucial role in delivering a seamless payment experience and minimizing the work required for hoteliers to reconcile payments and watch for fraud. The best payment solution for hotels is explicitly designed for the hospitality industry and includes integrated payment processing, connecting to your PMS software, booking engine, and channel manager.

Working with hospitality-focused payment solutions, you can expect benefits such as:

• The ability to accept payments anywhere a guest might be, including your website, social channels, front desk, etc.
• Elimination of any errors from manual entry due to guest data and payment information flowing directly from the reservation into the PMS
• Robust reporting and easy reconciliation due to transaction data all in one place
• Automation and preauthorizations to enforce your payment policies
• Dedicated support from payment experts with experience in hospitality to help quickly resolve disputes and protect from fraud

Payments don’t have to be complicated as long as you have a proper technology foundation. By following the best practices in this article and investing in a hospitality-focused payment solution, you can offer the payment methods your guests want to drive more reservations while optimizing high-priority day-to-day operations.

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