Taking Charge of Chargebacks: A Hotelier’s Guide to Combating Fraud | Back to Main Page
PART FOUR
Shifting Payment Trends: Balancing Convenience with Security
The payment landscape is rapidly evolving. While credit and debit cards remain the dominant payment methods, newer options are gaining in popularity. This shift presents both opportunities for flexibility and new risks for fraud.
A global survey of merchants identified these as the top five reasons for adding new payment methods:
To improve the customer experience
To reach new customer segments/markets
To adopt mobile payment methods
To work toward more integrated commerce systems
To reduce or minimize costs
Because emerging payment methods can expose hotels to new security risks, hotels should pursue them only if they have proper safeguards in place.
Emerging Payment Options
Virtual Payments
Virtual payments are becoming more common, especially in the travel industry. These payments are processed electronically without the physical presence of a card. OTAs and other third-party booking platforms often use virtual cards on behalf of travelers.
For hotels, virtual cards can be tricky because they’re issued for specific transactions and amounts, often not covering incidental charges.
ACH Payments
Automated Clearing House (ACH) payments allow customers to transfer funds directly from their bank accounts. This method is more cost-effective for hotels than credit card payments and faster than paper checks. It’s also more secure due to built-in encryption, authorization, and fraud monitoring.
Additional Payment Types
There’s a growing demand for alternative payment methods, including mobile wallets, real-time payments, and Buy Now, Pay Later (BNPL) options.
Best Practices to Protect Payment Data
Cybersecurity Policies
Develop a robust policy governing the collection, storage, and use of guest data.
Multi-Factor Authentication
Require MFA for all staff logins to reduce unauthorized access.
Digital Authorization Forms
Use digital systems to collect payment authorizations, reducing the risk of fraud and exposure to sensitive data.
Secure Payment Processing
Process transactions through trusted, encrypted payment technology.
Training and Awareness
Educate staff on the importance of vigilance and identifying suspicious activity.
Artificial Intelligence: A Double-Edged Sword
Artificial intelligence (AI) is transforming the payments industry by enhancing fraud prevention, automating chargeback management, and improving payment orchestration. According to Phocuswright’s 2024 State of Global Travel Payments report, AI can significantly boost fraud detection and streamline operations for hotels.
However, AI also empowers fraudsters with more sophisticated tools for phishing, identity theft, and data breaches. Increasingly, hotels will need to leverage AI to combat these threats effectively.
