A Hotelier’s Guide to Smarter Payments with Credit Card Analytics
Every dollar saved on hotel payment processing in the highly competitive hospitality sector can directly impact a hotel’s bottom line. With credit card transactions making up the majority of payments, optimizing hotel payment processing is no longer optional, it’s essential. Interchange fees, chargebacks, and transaction security all contribute to the cost of accepting payments, and failing to manage these expenses effectively can lead to significant revenue loss. With most major hotel brands requiring a credit card upon booking, understanding the power of credit card analytics is crucial.
Understanding Interchange Fees and How to Reduce Them
Interchange fees are the charges incurred when processing credit card payments, and they can significantly impact a hotel’s profitability by becoming a costly expense that directly affects the bottom line. In fact, interchange fees can account for 70–90% of a hotel’s credit card processing costs.
By leveraging credit card analytics, hoteliers can track and identify opportunities to reduce costs, enabling smarter financial decisions. A reconciliation solution further enhances this process by allowing hotels to drill down into the data, providing insight into how much of the interchange fees are driven by non-secure payments.
Secure vs. Non-secure Charges
A key factor influencing interchange fees is the difference between secure (card-present) and non-secure (card-not-present) transactions. Secure transactions occur when the cardholder is physically present at the point of sale, making them less likely to result in fraud and leading to lower fees. In contrast, non-secure transactions—such as those made online or over the phone—carry a higher risk of fraud, resulting in higher interchange fees.
Chargeback Prevention, Causes, and Management
Chargebacks occur when a cardholder disputes a transaction, resulting in the funds being reversed and returned to their account. This can be a significant loss for businesses, particularly in the hotel industry. To reduce these losses, it’s important to implement preventative measures such as guest verification processes and clear payment policies that set expectations upfront.
By having chargeback prevention strategies in place, you can minimize the chances of disputes. Additionally, using credit card analytics software gives you the ability to track chargeback trends over time, helping you pinpoint specific problem areas. It allows you to drill into chargeback data, such as transaction dates and the details of each disputed charge, making it easier to identify patterns or potential issues.
This insight can guide you in refining your payment processes, training staff, and adjusting policies to further reduce the likelihood of chargebacks and protect your revenue.
Maximizing Revenue with Dynamic Currency Conversion (DCC)
Dynamic Currency Conversion (DCC) allows customers to make purchases in their local currency, which is particularly beneficial for international travelers in countries with different currencies. DCC enables businesses to generate additional revenue based on the exchange rate at the time of the transaction. It also helps reduce disputes and chargebacks by showing the transaction price in the customer’s local currency, thereby protecting the company’s revenue stream.
Training front desk employees to promote DCC adoption is crucial, especially for international guests. This practice not only safeguards the hotel’s revenue but also improves the guest experience by offering transparency about the costs they will incur at the time of purchase.
By leveraging credit card analytics software, hotel teams can gain deeper insights into DCC adoption and its impact on hotel payment processing.
Enhancing Hotel Payment Processing with Evention’s Credit Card Analytics
Evention empowers users to leverage credit card analytics to optimize payment processes, reduce interchange fees, and enhance revenue. By identifying areas for improvement, such as shifting from non-secure to secure transactions, managing chargeback trends, and maximizing dynamic currency conversion (DCC), hotels can make smarter financial decisions that lead to cost savings and increased profitability. Filtering by date ranges and MIDs allows Total Recon users to drill into interchange fees and total chargebacks.
Adopting these strategies enables hotels to streamline operations, improve revenue, and provide a transparent, secure experience for guests, ultimately boosting their bottom line. By consistently applying these insights, hoteliers can stay ahead in the competitive hospitality market and achieve sustainable, long-term growth.
