Chargebacks are amongst the biggest challenges currently facing the hospitality sector, especially hotels.
Both large chains and smaller independent enterprises are being hit hard in equal measure with chargebacks. This is causing a real headache for hotel managers and owners who are looking for a way to juggle the ability to process secure and PCI DSS compliant transactions, with an exceptional customer journey, to aid growth in a competitive sector.
Whilst some chargebacks might be legitimate following a poor experience or made in error where the customer did not recognise the transaction, others such as ‘No Show’ where, for whatever reason, the customer may not show up to the hotel despite booking months in advance or last minute cancellations, the subsequent chargebacks can be a real frustration.
It is essential that you have clear guidance in your terms and conditions regarding such scenarios, which will enable you to challenge any chargeback received.
It is also essential for hotel management to understand that in the world of payments, an authorisation does not guarantee against chargebacks for the merchant especially in CNP channels.
An authorisation means that the payment gateway has simply checked whether the card has been reported lost or stolen and whether there are sufficient funds in the account.
If a fraudster is making a payment with a compromised card, the genuine cardholder will be entitled to charge the transaction back. Likewise, we are aware of ‘friendly fraud’ cases, where the actual cardholder makes the reservation and stays at the property, before denying that they ever made the booking. With the hotel being unable to evidence that it was indeed the genuine cardholder who made the reservation, the hotel will be liable for the chargeback and pick up the bill.
Authentication is where the genuine cardholder confirms their identity by completing additional checks, for example entering their PIN number into a card terminal.
This authenticates the transaction and converts the transaction to ‘Secure’ which significantly reduces the risk of fraud related chargeback.
A major challenge that the hospitality sector faces is that a lot of their bookings come via the telephone, where the cardholder will dictate their sensitive card information to the reservations team, which is subsequently typed in to either a card terminal, Virtual terminal or PMS platform.
SecurePay eliminates the risk of fraud related chargebacks for hotels, by authenticating MOTO (mail order/telephone order) and Omni-channel CNP transactions and processes the payment in a PCI compliant manner.
SecurePay eliminates the risk of fraud related chargebacks for hotels, by authenticating MOTO (mail order/telephone order) and Omni-channel CNP transactions and processes the payment in a PCI compliant manner.
I’d be delighted to talk you through this if you think your hotel, restaurant or business is vulnerable and in need of protection.
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