Merchant Services for Hotels, Motels, and Inns: What You Need to Know
When you’re running hotel, motel, or inn having the ability to accept credit cards is non-negotiable. Travelers are much more inclined to use their credit cards at hospitality establishments for a number of reasons.
As of October 2019, the average cost of a hotel room in the US is $130 (and continues to rise), and consumers are more likely to use credit cards for such a relatively high amount. Not to mention the fact, that travelers often book their rooms online, and credit cards are often the most convenient.
As ValuePenguin points out, online travel is the second most popular category for credit card usage.
And let’s not forget the popularity of travel rewards. With credit card companies increasingly encouraging customers to rack up points while traveling, people are choosing to whip out their cards instead of paying by cash.
The costs of credit card processing in hospitality [hotels, inns, motels, etc.]
As most hoteliers know, accepting credit card payments isn’t cheap, mainly for the following reasons:
Higher than average transaction values
As mentioned earlier, hotel rooms come with a higher cost, relative to daily purchases. Higher transactions typically come with higher fees, especially if your credit card processor is implementing tiered pricing, flat-rate pricing, or interchange-plus. (Hint: if your processor implements membership pricing, you won’t be subject to higher fees.)
The types of cards used in hotels typically come with higher processing rates
People are more likely to use rewards-based credit cards when booking hotels and spending money on travel. Such cards are more expensive to process, so merchants end up spending more to accept them.
More international payments
As a business in the travel and hospitality space, you will see a higher volume of internal payments. This adds more complexity — and costs — to the payment process.
Higher volume of card not present (CNP) transactions
Card not present (CNP) transactions, are common in hotels since many people book their stays online or over the phone. And since CNP transactions come with more risk, they’re more expensive process, and those costs are passed on to the merchant.
Want to sidestep the high fees of credit card processing? Consider a merchant services provider the implements membership pricing. Unlike traditional processors, membership-based providers don’t take a cut out your sales, which saves a ton in transaction fees.
Rather than a percentage, these payment processors charge a flat monthly fee, depending on your credit card volume.
Payment Depot is one example of a company that offers membership pricing. Read on to learn how we can help you save hundreds, if not thousands of dollars per month in credit card processing.
Why Payment Depot works well for the hospitality industry
Payment Depot was started out of frustration with traditional credit card processing companies. We are a membership company that set out to be different by protecting members with a transparent pricing structure.
Our program gives members direct access to the base rates established by credit card brands, allowing them to bypass percentage markups and extra fees.
Most processors also tack on a markup of 2% or more per transaction. And that’s in addition to charging a host of fees in order to raise their own profits even further. Unlike traditional credit card processors, however, Payment Depot does not charge a statement fee (~$10.00), a PCI fee (~$10.00), or an IRS fee (~$5.00) at all, which traditional credit card services charge on a monthly basis.
What’s more, Payment Depot doesn’t have those innocuous percentage fees such as the non-qualified surcharge (~100%) or the processor markup (~200%-500%). Nor do we have a cancellation fee (~$200.00-$500.00).
Payment Depot charges a flat yearly membership fee which is much less than those charged by traditional credit card processors. Our rates start at $49 a month, and when you do the math, Payment Depot’s plans are typically much, much cheaper than those of the traditional credit card processing services.
A 40% monthly savings is not unusual when switching to Payment Depot, with the savings going towards your much-needed profit margin. The savings alone is enough to encourage any hotel, motel or inn manager to opt for this service. Savings taken together with the no cancellation fee means that there is a no-risk factor in moving to Payment Depot.
Considering a merchant services provider for your hotel, motel, or inn? Get in touch with one of our credit card processing specialists. We can review your current merchant statement or proposal and offer unbiased advice on how you can save.