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Sertifi's & Stripe's Tips to Reduce Payment Costs

Hotel Office Masters Series Session 3 Recap

Download the recording to watch the complete webinar. Learn more about the series here.

In the third installment of Sertifi’s Hotel Office Masters Series, How to Reduce Unnecessary Hotel Payment Costs, industry professionals discussed ways to reduce unnecessary payments costs to keep your properties as profitable as possible. Let’s meet the speakers:

  • Mike Ryan, Director of Enterprise Payments, Sertifi
  • Peter Laspas, Manager, Customer Success, Sertifi
  • Rich Counts, Strategic Accounts, Enterprise, Stripe

Cost #1: Key-Entered Transactions

More and more hoteliers are seeing key-entered transactions get declined – but it’s not because your guest doesn’t have the funds. Mike shared it's because banks sees a large, key-entered transaction as a sure sign of fraud. That's because the processor is not able to verify that the credit card was present at the time of the transaction, such as via CVV or 3-D Secure verification.

To alleviate this risk, your credit card processor will set its rates accordingly, meaning a keyed payment will be charged a higher processing fee. So while keying in a credit card transaction may seem innocent, it can come with steep unnecessary fees.

Bottom Line

It’s inefficient, insecure, and much more costly to handle card-not-present transactions the same way as card-present transactions. Plus, it can keep you from getting paid and make the payment process more painful for your guests. Implementing an appropriate online payment solution for all areas of your business can save you significant time and money.

Cost #2: Higher-Cost Merchant Category Codes (MCCs)

Whenever a card is processed, you’re charged a percentage of the transaction amount. This amount, known as the interchange fee, goes partly to the card issuer and partly to the card network.

Interchange rates are set based on a number of factors. For hospitality businesses, two of the primary factors being considered are Merchant Category Codes (MCCs), as well as the method by which you process the card, which indicates your fraud risk.


Mike walked attendees through how these usually looks for hotels. Hotels are typically coded in the “travel” category, which automatically raises your fees. That’s because processors consider you the highest risk merchants, as hotels are highly fraud prone. On top of that, keying-in transactions through your front desk means you’re starting at the highest possible rate, another reason to stop key-entering.

Bottom Line

Simply using an eCommerce processing method can significantly lower your rates. For example, during the webinar, Mike shared an example of a large casino saving $56,000 a year – nearly 0.5% of every transactionby making those easy changes.

Likewise, hotels often have several lower-cost MCCs that can be used, such as for restaurants, bars, spas, golfing, etc. Similarly, Mike recommended setting up a MID/TID specifically for events using MCC “7399-Event Services.”

Cost #3: Lack of ACH Acceptance

ACH payments, otherwise known as eChecks, are electronic payments that get transferred between U.S. bank accounts by the Automated Clearing House Network (ACH) network. They let you capture payments with same convenience as a card payment but for a lower cost.

According to Mike, ACH transactions are generally priced at one-third to one-sixth of the cost of a credit card transaction. They can also be a great alternative to surcharging.

Bottom Line

It's best for your customers to have options and use whichever payment method is best for them. This is turn helps you get paid properly and on time. In the case of ACH payments, Mike shared one example of a luxury resort saving $13,805.77​ per month by shifting 17.7% of their total payment volume to ACH.

Cost #4: Fraud & Chargebacks

Almost every hotelier understands the pain of fraud and chargebacks. The best defense is a strong offense.

Cardholder Verification

Peter started the conversation by sharing protections that hoteliers can easily take advantage of with an online payment processor:

  • Address Verification Service (AVS): AVS compares the billing address used in a credit card transaction against the cardholder’s billing address that’s on file with their bank. Learn more here.

  • CVV Requirement: That's the three-digit number on the back of the credit card. While skilled fraudsters obtain the long number and expiration date on cards, they’re out of luck when they try to use this information online without a CVV code. This can also help you combat friendly fraud.

  • ​3-D Secure (3DS): 3DS adds a layer of protection to a payment transaction by requiring cardholders to authenticate their identity before the transaction can be completed. Learn more here.

Authorization Form Reviews

Peter then walked attendees through an example authorization form, which can give you several clues as to whether or not you're actually dealing with a fraudster. For example, a same-day arrival.

Check out Peter's post here on how to spot fraud on your auth form.

Being Prepared for Disputes

Unfortunately, chargebacks are inevitable because a guest can file one for any reason, legitimate or not. Peter closed by sharing some ways to be better prepared for chargebacks so you can respond and mitigate them as early as possible. For example, sign up for Early Fraud Warnings (EFWs) and know how to compile compelling evidence to prove a transaction was legitimate.

Bottom Line

It’s not enough to just protect your business with secure processes and verification methods. While those are vital, you also need to be prepared to defend your business when a dispute comes up, because no property is ever 100% protected from chargebacks.

Rich closed the conversation by reiterating the partnership your payment processor can have in helping you prevent and resolve chargebacks with ease. As a client, you should never hesitate to reach out, ask questions and get tailored advice, and develop a strategy for how to protect your business. And at minimum, you should be using the tools available to you, like CVV and 3DS.

Rich also recommended ensuring you have clear policies made available to guests. For example, being clear about your refund policy and even when a chargeback is an appropriate course of action. Lastly, it should be easy for guests to contact you with questions. Otherwise, they might give up quickly and jump straight to filing a chargeback.

About the author

Amy King

Amy King is the director of brand and content marketing at Sertifi. In collaboration with teams across and outside of Sertifi, she guides brand and creative marketing, content strategy, public relations, and community engagement.