A payment gateway is a system that is used to process customers’ payments and is widely used by e-commerce websites to enable online payments. Hence, a payment gateway provider is a business that provides payment gateways as a service such as Eghl, Billplz, iPay88, and Paypal.
In this article, I am pleased to guide you on how to choose the right payment gateway for your hotel business, what you should consider before choosing it, and compare the top 4 popular payment gateway providers in Malaysia. Before that, lets' check out how the payment gateway works actually?
How to choose the right payment gateway for the hotel business?
Before deciding on which payment gateway provider that suits your hotel business, there are a few things you need to consider so that you make the right choice. Below are four things that I recommend you take into consideration while choosing a payment gateway.
Based on cost (setup fee + annual fee + transaction fee)Different providers will have a different setup, annual and transaction fees which I will show you their differences in the table later. Here’s what you need to know in advance:
- Setup fee: Known as onboarding fee too. Some payment gateway providers waived the setup fee according to the subscription plan that they offer.
- Annual fee: Not every payment gateway provider requires their merchant to pay the annual fee. Some put the T&C that the annual fee can be waived if your monthly transaction volume exceeds some amount.
- Transaction fee: Here’s the most important part. It is depending on the package that you subscribe to. Credit cards, online baking, or e-wallets normally will have different transaction fees.
Based on the settlement periodThe payment settlement period is referring to the time taken by the payment gateway provider to transfer the money to the merchant’s account. The fastest the period, the better the cash flow for your hotel business.
Based on security and protection
- Protection against credit card chargeback
A chargeback happens when a customer contacts their credit card company to dispute a purchase or ask for a refund. An example of chargeback fraud that happens in the hotel industry is when the customer insists they never authorized the transaction, but the truth is they had.
So, it is important for a hotel owner to select a payment gateway provider that takes fraud management very seriously. Choose the one that offers built-in fraud prevention and detection capabilities.
- The security that prevents DDoS attack
DDoS or its name referring to Distributed Denial of Service is the type of attack that completely prevents users from accessing it. As a result, a bad user experience and damage your business reputation. In this situation, the attackers might request some payment for stopping the attack.
Recently, in March 2022, Billplz detected a massive, coordinated DDoS attack. Hence, their merchants who use Billplz as the payment gateway will experience customer trouble paying with Billplz. However, Billplz manages to settle down the issue professionally. They keep their merchants updated through their official Facebook page as well as email.
So, what I wanted to highlight here, as a hotel owner, you have to make sure that the payment gateway provider you choose has the strong capabilities to resolve any attack issue because it can happen to any business website.
- Protection against credit card chargeback
Based on stabilityThe last thing that is important for you to know is the payment gateway stability. The unstable payment gateway might cause the payment gateway down and unresponsive, hence your customer is unable to proceed with the payment on time.
So, how to know whether the payment gateway is stable or not? I suggest you always do more research and read their customers' reviews through social media like Facebook, search the keyword “down” on Twitter, or ask other business owners around. Check also on how they respond to the issue.
What should the hotel do before looking for a payment gateway?
There are a few important things that you should take into account when looking for a payment gateway for your hotel, so you make the best decision that helps to maximize your hotel revenue.
Estimate the booking transaction volume per monthDifferent payment gateways provider will have different offers and rates. Knowing your booking transaction volume every month will help when it comes to negotiating the rates and also choosing the right tier to optimize the revenue margin for bookings made through your online booking engine system.
Knowing the cash flow requirementGetting the cash flow expectation from your finance department is important because each of the payment gateways has a different settlement period (daily or weekly) making sure it meets your finance department's expectations.
Find out your guests preferred payment options (e.g. Credit Card, Online Banking, E-wallets)This is handy when it comes to choosing the “right” one as different payment gateway providers will have different rates for each of the payment options (Credit Card, Online Banking, E-wallets). Based on the preferred payment gateway options, choose the payment gateway provider that offers the cheapest transaction fees.
One tip for you, you can actually subscribe to more than one payment gateway provider. For example, you choose Eghl for Credit Card transactions because it has the cheapest transaction fee, and choose Billplz for Online banking transactions if they offer you a cheaper transaction fee compared to Eghl.
Top 4 Malaysia Best Payment Gateway Providers
While you are looking for the best payment gateway provider, I would also want to emphasize that having multiple payment gateway providers also would be beneficial to your hotel business. This will help you to optimize the transaction fees for different payment options as well as decrease payment failure where one of the providers might be in a maintenance / down, then you still have another payment gateway provider take place.
Choosing the right payment gateway provider for any business is not as easy as it seems. The most important thing is, you know what your business needs and what is your expectation towards it. Not to forget, make sure your online booking engine system can integrate with the payment gateway.
Lastly, if you would like to have extra tips on a payment gateway for hotels, you may download our Ultimate Guide to Hotel Payment Gateway for free.