What Is An Online Payment Gateway? The Basics For Property Managers

Mar 12, 2018 | Property Management Software, Vacation Rental Industry

Most vacation rental businesses work with channels that generate bookings for them. This is definitely important, but let’s give it a second thought. Travelers usually compare many properties across several channels and websites before making a decision. What about the payment gateway?

When you give your users the option to book directly at your site, you are differentiating yourself from those who do not, thereby increasing your chances of conversion. You are also avoiding channel commissions, which means you can reduce your rates in pursuit of more bookings and improved profitability.

Integrating your booking engine with your property management software also brings a host of additional benefits that make your operations much more efficient.

But it’s so complicated, you might think. Not anymore if you understand a few basic concepts.

man with a laptop

Let’s get started

When you want to start your online business, you need to integrate a booking engineThis makes online bookings possible. One of the main benefits of having an integrated booking system is that you will be able to accept online payments.

When a client is selecting the dates, location, and other details, he is inside the booking engine. As soon as he selects “proceed to payment,” the system will take him to the payment gateway, which is fully integrated.

The main job of a payment gateway is to validate your customer’s credit card details securely, make sure the funds are available for the payment, and get you paid. It is the equivalent of a physical point-of-sale terminal on your property.

It lets your customer submit their credit card details and then securely passes this sensitive financial information from the customer to the merchant and then between the merchant and the bank. The payment gateway then tells you whether the charge has been approved by the cardholder’s bank and submits your charges for settlement.

Choose a reliable service

The experience of processing an online payment should be effortless for your guests. They should not even be aware that an online payment gateway is being used.

It’s essential that you work with a gateway that connects with your booking engine and works with it properly.

You want your customers to be able to book your rooms or properties without having any issues during the online payment process.

About the commissions

When clients book through other channels, their payment provider will charge your bank a percentage (approximately 2%) for using the virtual credit card.

Merchants act as an intermediary between two parties (the payment gateway and the bank), eliminating the need for either party to divulge credit card numbers or bank account details to the other over the Web.

All merchants charge a small commission on every transaction. The exact amount varies according to the type of account and the amount of the transaction. Most vacation rental businesses that offer online booking are unaware that there might be a merchant offering a better commission rate, meaning more profit for the owner or agent.

Different currencies

Currency conversion is also very important. People from all over the world will want to book from your portfolio, especially when they can do it easily online.

Choose an online payment gateway that will convert any currency without charging you excessive fees to do so.

It is very complicated to have the details of all merchants and be able to decide which one is most convenient for you, but it can be totally worth it. Don’t stick with the first option you found because you might be potentially losing money by paying unnecessary commissions.