In order to avoid the use of cash as much as possible we are thinking about implementing a sort of "online payment system" that the guests will use on arrival in order to pay the balance.
So far the only solution dedicated to the industry I found was IWB payment system (http://www.hosteltraveler.com/payments-systems.php), has anyone tried it ? The thing is that they charge a 5.9% comission on all the transactions which added to the usual 10% agent comission is too high for us.
There are also the general solutions such as paypal but again when you are working with international credit cards the transaction fees are quite high, the problem is the same with a basic card processing system for which the guest will pay too much operation fees.
Is anyone using a good solution to realize online credit cards payment or is it utopian for a hostel business ?
Thanks in advance,
PS. The other issue is that we are based in South America and not all the program are available in this side of the world...
13 years
I think that many hostels in that situation just accept "cash only". One possibility is to make a "cash only" policy, but allow credit cards if the traveler is having an emergency and has no other way to pay before they leave, just as a last resort.
13 years
The cheapest system I could imagine would be having card processing facilities from a bank - i.e. a credit card terminal. I have no idea how expensive this is in South America, but in Europe or North America this would be the best solution. I can't imagine any online system would be cheaper. Otherwise I would just go with Paypal - it's simple and it seems to work. The problem is that whoever you use will charge in excess of 5%, as they are being charged by the banks, and they are putting their cut on top.
13 years
IWB Payments, mentioned by Eiram above (http://www.hosteltraveler.com/payments-systems.php) is also the only service of it's kind (virtual terminal) allowing the hostel to collect for cancellations and no-shows for reservations booked from virtually any source. The benefits far outweigh the costs, especially in regions where bank credit card processing is difficult or costly to obtain. And, IWB Payments accepts cards from many more regions and countries not yet accepted by PayPal. Additionally, regarding costs, some hostels charge a 2-3% surcharge to customers who absolutely need the flexibility of paying with plastic.
13 years
Check with a couple of banks and compare their rates with Paypal and Hostel Traveller. Also look at other merchant/internet payment gateways
The banks (well those in Australia and Asia) have a number of different card processing options and different costs as well.
Things to consider:
a) How the Payment is Transacted
- Manual (rememmber the old carbon paper swipe card mechanical machines)
- Electronic Terminal (the ones you usually see in a department store)
- Internet (process through a payment gateway, similar to Paypal)
b) Verification
If you suspect a person doesnt have enough funds, can you call your bank to see if their card has sufficient funds or if the card is not stolen?
Electronic terminals and internet gateways usually do this automatically but you need to check to see they do do this instantaneously
c) Settlement
Do you get the money deposited into your bank account immediately after the card gets swiped or does it occur once a day/week/month?
d) Chargebacks
Make sure you read the fine print on chargebacks (ie when guests claim they were not the ones who signed the card slip or dispute an amount charged) and the refund process and time for these.
Cheers
Jon
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