4 methods to accept payments for online bookings

As part of our occasional series to help you make sense of your different options for taking online bookings at your guesthouse or bed & breakfast, here we talk about your choices when it comes to taking online payments for your online bookings.

1. Deposit = commission
Some online booking software providers will take a deposit from the guest when they book online, and the software provider simply retains this as their commission. The guest then pays you the balance when they check out. This is very simple, and means that you don't have to concern yourself with the mechanics of online payments, but will work out expensive in the long run, compared to paying a normal card processing charge plus software subscription.

2. Booking provider acts as payment processor
Some online booking software providers will themselves act as a credit card payment processor, and collect payment on your behalf, charging you a card processing fee. They will make a margin on the card processing fee, but if their volumes are high enough, then you still might get a good deal. You'll want to understand exactly who has your money, and for how long, in this instance. If your software provider is also your card processor and they go bust, they might go bust with a lot of your money still on deposit (as apparently happened with Globespan/E-clear).


3. Process payment on your choice of payment gateway
Probably the most common method is for the online booking software provider to pass your guest through your own preferred payment gateway (e.g. SagePay or PayPal or Authorize.net). So the money goes straight to you, and you pay your gateway standar card processing fees. There are actually two versions of this method:

(a) Using a hosted payment page: (this is the method we use at KeepMeBooked) The guest is routed to a page hosted by the payment gateway to make their payment, then returned to your site afterwards. This is super-secure and super-easy for you and for the online booking software provider, as neither of you actually see the card number itself, so don't have to concern yourselves with PCI-DSS compliance (which doesn't just mean having a secure server, but complying with a truckload of other checks and audits). Also means if you use a widget-based system (like our system, KeepMeBooked, where the online booking process happens with your own webpage) the guest stays on your own website right up until the actual payment.

(b) Using an API call: The online booking software provider captures the card details on their own secure server, and passes them securely to the payment gateway for authorisation behind the scenes. So rather than be sent off to a hosted payment page at the very end of the process, the guest is handed across to the online booking software provider's secure server at the very start of the booking process, and then they stay there to make their payment. This  requires the online booking software provider to be PCI-DSS compliant (because they are handling the guest's credit card details), and requires you to use a payment gateway with an API, which might be more expensive (e.g. a PayPal Website Payments Pro account, which includes API access, costs £20 per month, while their Website Payments Standard account (which doesn't include API access) is free.)

4. Validate card, but don't actually take payment
This isn't really a payment method, as no money changes hands. But it is still an option provided by some online booking software providers. The guest submits card details, but the card is not charged. The card is just validated to check that it is a real card number (which, if you are interested in this kind of thing, requires a Luhn Algorithm), and then discarded. For most guests, that's enough to ensure they turn up. But if they don't show up, you don't have any card details to collect any payment.