Cash was king in the beginnings of Property Management Systems (PMS) and Point of Sale (POS) solutions. Credit cards, though present, were not the primary mode of transaction, leading to early digital systems lacking fully integrated payment processes.
This outdated approach clashes today, where digital payments dominate, forcing hoteliers to adapt or risk inefficiencies and unhappy customers.
The PMS to payment gateway evolution is a game-changing transition prioritising seamless, integrated transactions.
This article explores how this transformation elevates staff productivity, improves the guest experience, and unveils new revenue potential for hoteliers.
The problems of traditional hotel payments
Many hotels still rely on traditional bank terminals to extend their PMS, leading to problems in efficiency and automation, risk management and compliance, guest trust and security, revenue optimisation, and market responsiveness.
Let’s explore the common hotel problems and how a PMS can solve them as your hotel payment gateway.
1. Wasting time manually processing payments
Relying on physical or virtual POS terminals for payment processing, including guarantee deposits and cancellation fees, is time-consuming and tedious. For the website booking engine, such approaches struggle to keep pace with online booking demands and separate the moments of receiving the booking and processing the deposit payments due.
Even the processing of the guest-present payments on stand-alone disconnected terminals requires double entry and is prone to discrepancies in the processed and registered amounts. That leads to significant staff time spent processing payments with a high risk of errors from manual handling.
The Solution: Let your PMS and guest-facing apps handle and trigger payment and guarantee requests automatically or with a click at the right time, send them for processing to the terminal or payment provider, and then update the relevant folio balance automatically. This modern approach saves substantial time and prevents errors. When your PMS is your payment gateway, you can forget about processing errors or discrepancies between processed payments and what’s in the guest folio.
2. Missing deposits, cancellation fees and revenue opportunities
Because traditional payment management methods rely on significant manual effort, especially when collecting pending deposits or cancellation fees, revenue loss from delays is common. This effort is especially true if your hotel has complicated guarantee policies or requires deposit or cancellation fee collection in time relative to the time of booking — for example, 50% at the time of the booking and 30% three days before arrival. Ensuring the fees are collected means even more manual workload, including further revenue loss from unbooked rooms and uncollected cancellation fees.
The Solution: When your hotel solution automatically stores (tokenises) guests' credit cards and collects the required deposits, pre-authorisation, and cancellation fees, you secure more hotel revenue. Set processing rules based on the guarantee policy for each booking and let the hotel solution process all payments automatically. If a payment fails, the solution will inform you and even contact the guest to request a new payment method. Successful payments change the booking status to guaranteed – and the system can even issue and send an invoice if fiscally required in your region.
3. Chasing failed payments
Failed payments are common in hospitality, both from good and ill-intended guests. Honest mistakes can cause a card to have insufficient funds or the guest to reach transaction limits. Both cases require hotel staff to contact guests to secure payment, costing valuable time and risking potential revenue loss if not resolved quickly. Chargebacks or stolen card frauds also exploit hotels, falsely inflating booking numbers, leading to unoccupied rooms and revenue loss.
To combat these, OTAs have developed their payment solutions, but they only solve this problem for the bookings passing through them, which cost an additional slice of revenue from the high virtual card costs.
The Solution: Let your PMS trigger and process the payment requests and pre-authorisations while updating the payment status instantly. For failed transactions, it can send the booker a new payment request. If that fails, you will get another notification, and the solution can cancel the booking and send the free rooms for remarketing automatically. – saving hoteliers significant time and remarketing rooms without delay.
4. Worrying guests with risky handling
For phone, email and business travel bookings, it’s still common for hotel staff to ask guests for credit card details by file, paper form, or email. Even for collecting credit card details as a during-stay guarantee at check-in, many hotels still key in guests’ credit card data in insecure data fields of their systems to be able to trigger the collection of the amount they blocked on the stand-alone terminal.
The practice is risky, and guests don’t like it. With recent well-media-covered incidents of substantial credit card data leakage, guests feel uneasy about sharing sensitive data even with reputable hotels. It also impacts compliance rules that ensure credit card data is not leaked or misused.
The Solution: Send guests a secure online credit card form when guaranteeing phone or email bookings. Embrace a safe and compliant online check-in solution that collects, tokenises and stores the tokens you need as a during-stay guarantee with the booking. Or use connected terminals that will do the same with the guests checking in traditionally. Your guests will feel secure knowing their data is stored and processed securely according to PCI compliance rules. They will also appreciate the professional treatment by a vendor who cares about their safety.
As an additional bonus, unlike popular payment links that some hoteliers generate from their payment processors, the right hotel solution will let you store and use credit cards throughout the guest journey. No more rekeying the pre-authorisation on the terminal to take a missed mini-bar charge. Use the tokenised card or the blocked pre-authorisation amount with a single click directly from the booking in the hotel platform or even implement an automated check-out collection without moving a finger.
5. Risking high chargebacks
The risk of card chargeback is higher when processing cards without the physical presence of guests. This risk includes payments made by guests arriving from online travel agencies (OTAs), the hotel booking engine, or those requested by guests as guarantees for their phone or email bookings on POS terminals.
When hotels don’t enforce Strong Customer Authentication, SCA, or simpler 3DS, the risk of chargebacks increases, threatening revenue and even compliance by making it harder to meet payment processing regulations and data security.
The Solution: The system can automatically request an SCA or 3DS verification on all e-commerce transactions, shifting liability and eliminating chargeback risk. It can even attempt to request it on bookings coming from an OTA – even though you can’t collect SCA or 3DS at the time of booking since the OTA collects the credit card details, you can enforce SCA during the online check-in request you send to guests and dramatically reduce the chargeback risk.
Smarter payment solutions even allow you to design risk management rules, applying multi-factor analysis based on the payer profile to increase conversions and mitigate risks. When appropriate, you can combine payment processing with additional security measures like requesting the booker’s ID as proof of transactional validity – especially if you cannot enforce SCA or 3DS, like in the US.
6. Doing complex reconciliation
When processing payments in multiple systems, there are always reconciliation issues. Accountants know the complexities of ensuring that collected payments match the ones sent for processing, those reflected in the accountancy records and that payments sent for processing match those paid out and those held as processing fees.
It’s especially true if the payments are processed on stand-alone terminals when the amount in the PMS and the amount sent for processing can differ due to manual errors. Or even more when the hotel uses several different payment solutions like terminals at the front desk, a second payment provider for the booking engine, and a third for the online check-in.
The Solution: When your hotel solution is your payment gateway, the PMS amounts and those sent for processing will always match. The system can control and trigger all payments. It also provides a stable payment infrastructure and a simplified reconciliation base for all payment-related guest touch points, including website, OTA, online check-in/out, upsells, reservations, and front desk. It knows the payout status of every payment, including the payouts made to your bank account and the withheld processing fees. Your hotel solution reconciles all payments and payouts and gives you a simple report to validate them.
7. Facing compliance risks
Credit card companies have security compliance standards to protect cardholder safety. However, using paper or unprotected electronic file forms for collecting details or keying in credit card data in unprotected PMS note fields carries significant compliance and reputation risk. Violating the standards puts the card at risk of unauthorised access or fraud – and a violation comes with substantial fines and penalties, not to mention the reputational damage of leaking guest credit card data.
Using non-PCI level secured credit card collection forms or storing credit card details in PMS notes goes against compliance regulations. It means you’re taking a significant risk of exposing your business to financial and reputational damage.
The Solution: Connect your hotel and payment solution in a single, high-security, and PCI-compliant environment. With tokenisation, you process no credit card data in your organisation and reduce the scope of your compliance requirements. You keep your hotel complaint and secure by moving to the cloud, relieved from the data storage and protection risks, guaranteeing your guests' credit card safety, simplifying payments and guarantees, and removing credit card processing risks.
8. Struggling to adopt digital guest services
Boosting staff productivity while staff shortage is higher than ever needs digital guest-facing technology. Securing delightful guest experiences for modern guests requires a minimum of online check-in and check-out. Boosting revenue needs digital upsell services. The problem is that these services can’t fully function without seamlessly integrating payments within the booking journey — for example, a check-in credit card to be used in case of damage or as a guarantee for the minibar.
Using different payment processing methods online or even for separate digital services at the front desk disrupts this journey and complicates your reconciliation process. And if you ask guests who checked in online for a new credit card guarantee at the physical check-in, you remove the time-saving the guest desired from checking in with you online in the first place.
The Solution: Use the same payment infrastructure throughout the guest journey that’s at the heart of your hotel solution. With the guest-facing apps, you can acquire, and with the staff-facing app, you can store (tokenise) and reuse payment methods regardless of guest journey stage or booking channel with smooth reconciliation. No matter what, you can always bill your guests, elevate guest service, embrace new revenue opportunities, and reduce time spent on annoying formalities.
9. Smoother onboarding and daily use
Hoteliers often face friction when they source the full solution from multiple vendors. Problems include compatibility issues between the hotel solution and the payment gateway orchestrating complex technical settings by the hotel and payment solution provider to ensure that the infrastructure operates as expected.
Or they bounce between the support of the two organisations to find out who needs to solve a technical issue in case of a problem...
That often means hoteliers spend hours or even days jumping between the payment and hotel solution providers without the ability to process payments. Getting the right proposals and agreements, ensuring full compliance, and coordinating synchronised onboarding can be challenging and threaten a go-live.
Additionally, suppose a particular payment method changes its processing workflow. In that case, the given payment provider may implement it in a way that is incompatible with how the hotel solution handles payments, so it may lead to disruption in the capacity to process that payment method.
The Solution: Embrace the payment solution offered by your hotel solution provider. If your hotel solution provider has taken the responsibility to offer their payment solution, they have focused on ensuring all payment methods operate at all times. They are responsible for troubleshooting and resolving the issue if it doesn't. You will not bounce or serve as a mail pigeon coordinating two or more support organisations. You have a single point of contact and a single partner to agree on your fees, coordinate onboarding with, and turn to in case of an issue.
Hotels solving payment problems
Automating payments across the guest journey
Four Sisters Inns, one of the finest US boutique hotel groups managing more than 20 properties at prime locations in California, decided to commission the building of its booking engine to meet its brand identity and requirements.
With a seamlessly integrated payment form provided by Clock, they have built their custom group booking engine on top of Clock’s compliance and certification. That ensures a seamless and compliant credit card data collection without the expensive and hard-to-achieve PCI certification.
Each deposit payment updates the booking folio and eliminates all errors automatically. When a guest books, the credit card is tokenised with bank-level security and saved with the booking for reuse throughout the guest journey.
Their booking guarantee policies frequently involve phased-off deposit payments, for example, three days before arrival. Four Sisters Inns sets automatic rules that trigger the deposit due automatically. If the first attempt fails, the hotels receive instant notification of a failed payment.
A few days before arrival, the hotel solution sends an online check-in invitation where guests can keep or replace their initial card as a during-stay guarantee. When they do, the card attaches to the booking for instant use with all further payments.
Without a usable payment method, online check-ins would be impossible. They also relieve the reception desk staff, who can focus on delighting guests instead of formalities.
Fusing the hotel platform and the payment solution, including custom-built and third-party components, improves the guest journey and operational efficiency, which would be impossible if the systems operated separately – regardless of integrations.
Using automation rules for OTA bookings
Elegencia Group, a French group managing 20 upscale hotels in Paris, created payment automation workflows that detect bookings confirmed with OTA virtual or guest credit cards.
The hotel solution then automatically triggers the deposit payment collection at the time of booking for non-refundable rates guaranteed with guest credit cards – or waits with the payment processing until the OTAs unlock the virtual credit card, usually the day of arrival or departure, depending on the OTA policy.
They collect city tax automatically during check-in with separate automated workflows. Based on this differentiation, they can send personalised communication to guests, providing different welcome messages or online check-in instructions.
The online check-in automatically recognises if the card on record is virtual and requests a new card from the guest as a stay guarantee. For bookings guaranteed with guest cards, it will propose to use the original card used for booking as the default, with an option for the guest to change it if they wish.
If a payment fails, the system automatically notifies staff, changes bookers, and even cancels the booking if payment collection fails – releasing the room for instant remarketing. Everything happens automatically to ensure timely collection and releases, allowing staff to spend more time on delightful guest service.
Connecting the complete hotel journey
Turning the PMS into a hybrid platform combining property management, guest journey facilitation, and fintech capabilities can solve the greatest operational challenges.
Powerful routine task automation, like automating booking guarantee deposits, streamlines the return of cancelled or unpaid resources to the market, significantly improving revenue opportunities and the guest experience.
Features like quick online check-ins and efficient handling of during-stay guarantees focus on the essentials – delighting guests and maximising sales while removing friction points like delayed deposit returns.
Summary
Fragmented handling of payments reduces staff productivity and revenue while increasing administration costs and compliance issues. It also prevents the broader adoption of digital guest services critical to delighting modern guests. In-platform payments are much more than the standard disconnected payment processing; they’re the foundation of the hotel solution – enabling advanced property management while unlocking the digital guest journey.
Where standard payment processors compete in transaction fees, in-platform payments create new strategic opportunities, save costs, and enable extra revenue for hoteliers. Hybrid hotel platforms controlled and delivered by the hotel solution vendors ensure better functionality, frictionless onboarding, daily use, and a reconciliation experience. Hoteliers can rely on one vendor for the use and support of the entire solution – a huge difference compared to orchestrating offers, onboarding, delivery and support by disparate vendors.
Clock is a hotel solution where every payment method is smooth, instant, automated, and connected. The platform isn't only a transaction tool – it includes one of the world’s most sophisticated payment workflows in hospitality that users can control, similar to platforms like Shopify for e-commerce. With today’s guest expectations, smooth payments are a must. Only you can choose a solution to make that a reality.
