Understanding Payment Gateway Fees for Small Hotels
It’s critical for small hotels to expand their business by developing and increasing their online presence upon the customers. It is the main gate to attract the global customer through the online distribution. The modern era requires hotel to be more adaptive with technology. Not only that they need that to cope with modern competition, they also need that to accommodate modern traveler. Hence, having a complete package of hotel’s website and booking engine is mandatory. Making a direct booking platform for your hotel website is crucial to stay relevant with the market. It’s important to make the customer’s journey at ease when they are interested in booking your hotel room. And sure, to do this you will need a payment gateway to help you out with the payment.
After understanding payment gateway on the previous article, now we can move to the next level. Having a direct booking platform means you need to apply the payment gateway. Therefore, your hotel can get paid through the platform. By implementing online payment gateway, your hotel can accept payment through many ways of transactions. It is indeed such an investment for your hotel’s future. But there are many things to consider when you want to set up an online payment gateway in terms of the costs. Providers offer various types of services that you can adjust based on your business and also your budget. Here Caption explain more about the fee providers usually charged to the business owners including small hotels.
What is Payment Getaway?
Payment gateway is an online service that provides a secure transmission of cards information, including a fraud checks and verification of customer’s available funds and also debits the required amount of costumer’s account. Payment gateway works as the bridge between your hotel’s website (your business) and the banking systems. In the process, your customer will not interact with this payment gateway. All of those information will be submitted through the secure payment gateway through the relevant financial networks to your merchant account. Then merchant account will authorize the card and receive the payment. The funds then will be stored here for short period of time before soon be transferred out to your business account.
What are the Payment Gateway basic fees?
1. Transaction fee
Several payment gateways charge you for using their apps. You will be asked to pay a fixed fee per each transaction, and percentage from each purchase or a combination of both. For example, you will be charged 2.5% + $0.40 per transaction. This transaction fee will require you to pay a certain amount of percentage regarding the payment portal you are using for every transaction process. The amount can be around 2% to 5% per transaction. Refund fee is required by some payment gateway providers aside from the reason of the refund. If there are fraudulent cases or identity theft, the providers are asking for a higher amount of refund fee.
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2. Monthly Fee/Ongoing fee
Several payment gateway providers will charge you a monthly fee for subscribing to their service in letting you collect money through their service. This monthly (or also called the ongoing fee) is the largest fee you have to pay in the whole online payment gateway service scheme. This monthly charge may distinct based on the quantity of payment that is being processed and the number of back accounts associated with the payment. Of course there will be an additional monthly fee, for the example, if you demand to have a fraud detection and customer support.
Some of the payment gateways demand your business to make a certain amount of target bills, otherwise they will charge you a fee. This is called monthly minimum fees. But not all of the payment gateways demand this, that is why you have to be very smart in choosing payment gateway. Gateway fee is a monthly fee for using the process provided by payment gateway such as passing the costumer’s card data in the internet whether to authorize or deny a credit card.
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3. Setup Fee
Set up fee is the amount of money most payment gateway providers charge to business owners. This fee is related to any costs associated with setting up the payment gateway account. You will only need to pay this once. This should not stop you from setting up a payment gateway for your hotel because it’s usually small.
Is there any additional fee?
There are several additional fees outside these basic fees that you have to pay. This kind of fee is varied across several payment gateways. Address verification fee is the fee you should pay every time you add an additional billing address. When you are cancelling way too early within the contract, you may face the cancelation fee. The contract might have said that you can cancel at any time, or that there is no contract about cancelling, but you have to understand that sometimes it only explain regarding the payment gateway, not your merchant account. In this case, you can’t actually do anything with only a merchant account.
Chargeback fee is the amount of money you should pay regarding the dispute filed by your customer. Chargeback or also called reversal, is a customer protection provided by the issuing banks, which allows cardholders to file a complaint regarding fraudulent transactions on their statement. Once the cardholder files a dispute, the issuing bank makes an investigation into the complaint. Your customer can dispute a charge over several reasons such as credit card not processed, item not received and technical problems.
It’s crucial for your hotel to learn more about the payment gateway pricing system provided by the provider. Online payment is being the essential element in current hotel industry. Many travelers rely on the benefit offered by the easiness of online transaction in their everyday lives. Every payment gateway provider has their own characteristic you need to pay attention to. Every single provider have their own fee structures, rules and regulation. Your hotel can implement a booking engine with an integrated hotel reservation system and online payment gateway.