Hotel Payment Processing Series: What You Need to Know About the Latest Visa Network Fee Updates

At least yearly, Visa issues updates to their network fees. As a payment vendor, it’s our role to make sure hoteliers understand the updates that are relevant to you (and help you ignore what isn’t).

Update 1: Expanding the Use of Estimated and Incremental Authorizations Globally

• Why It’s Relevant: You authorize cards for room fees, tax, and incidentals whenever a guest checks in.
• What's Changed: Prior to April 2023, merchants had to operate under a specific MCC to be able to use incremental authorizations, e.g., in a hotel’s case, increasing the total amount authorized once a guest exceeds the initial authorization amount by adding incidental charges to the initial auth. As of April 2023, any business operating under any MCC can use incremental authorizations.
• How It Works: An estimated authorization lets the card network know that the final authorization might be for a higher amount. That higher amount will be processed as an incremental authorization.
• Bottom Line: As part of this expansion, Visa is introducing a 2 basis point (0.02%) scheme fee on estimated authorizations and a 2 basis point (0.02%) scheme fee on incremental authorizations. This means card fees have increased by another .04% or 4 basis points for hoteliers processing payments through a PMS. This makes it more expensive to keep processing event payments through your front desk/PMS, so consider alternative options.
   

Update 2: Increasing Non-Domestic Currency Settlement Volume Fees

• Why It’s Relevant: You welcome domestic and international guests.
• What’s Changed: The fee has increased from 0.02% to .05%.
• How It Works: The fee applies to settled transactions where the business and cardholder country differ, and the clearing currency is anything other than EUR in the European Union, GBP in the United Kingdom, or CHF in Switzerland.
• Bottom Line: International transactions just got more expensive.