Virtual cards have changed how owners of establishments like apartments, guesthouses, hotels, and B&Bs receive payments from online travel platforms like Booking.com and Expedia. This guide explains what they are and how they benefit your business.
What are Virtual Cards?
Imagine a temporary, digital credit card that is generated only for a single payment. That’s a virtual card! Essentially, when a guest prepays an extranet, the extranet provides a unique, single-use virtual card for the accommodation provider to claim their money. It has a 16-digit number, expiry date, and CVV, just like a physical card, but it’s generated online for a specific booking. It’s usually pre-loaded with the exact amount of the guest’s stay. Virtual cards allow you to have peace of mind that the guest has ‘prepaid’ for their booking, but that if there is a cancellation the funds can easily be returned to the guest.
How online travel platforms use them (e.g., Booking.com, Expedia)
When a guest books your guesthouse through platforms like Booking.com or Expedia and chooses to ‘pay at property,’ the platform often issues a virtual card to you, the guesthouse owner. This card is then used to charge the guest’s payment for their stay. The date this occurs, does differ based on the extranet/ channel.
How to Process a Virtual Card
Treat a virtual card like any other credit card payment. You will receive the virtual card details (card number, expiry date, CVV) from the online travel platform. Enter these details into your existing Payment Gateway or card machine to process the payment, usually on the guest’s check-in date.
Traditionally, processing these virtual cards involved manually retrieving card details and remembering specific processing dates for each channel. However, services like NightsBridge Pay are automating this process. They securely store the virtual card details and automatically “swipe” the card on the designated day (which varies by extranet – for example, Booking.com on activation, Expedia on arrival).
This automation means less manual work for you. If a payment fails, you’d still need to get new details from the extranet. For modifications, the system adjusts, and for cancellations, you have the option to manually process if you wish to enforce your policy. A key benefit is that no authorisation documents are typically required, as the payment is processed on the channel’s card, not the guest’s personal credit card.
Platforms Using Virtual Cards
Many major platforms use virtual cards, including Booking.com, Expedia Group (Expedia, Hotels.com, Agoda), and various Corporate Travel Platforms. This means you’ll likely encounter them often if you list your guesthouse on these sites. Virtual cards are a secure and efficient way to manage payments from online bookings, offering peace of mind and simplifying operations.
Key benefits for your establishment.
- Guaranteed Payments: No more worries about no-shows or late cancellations! Once the virtual card is issued, the payment for the booking is guaranteed by the online travel platform. This means you get paid even if the guest doesn’t arrive (according to your cancellation policy).
- Enhanced Security: Virtual cards are much safer than handling guest credit card details directly. Since they are single-use and expire quickly, the risk of fraud or compromise to your guesthouse’s payment system is significantly reduced.
- Simplified Reconciliation: Each virtual card is linked to a specific booking. This makes it incredibly easy to match payments to reservations in your accounting system, saving you time and reducing errors compared to manual tracking.
- Integrated International Payments: For international guests, virtual cards simplify cross-border transactions. The online platform handles the currency conversion, and you receive payment in your local currency (ZAR) without extra hassle.
- Reduced Admin Work: By automating the payment process and reducing the need for manual follow-ups on payments, virtual cards free up your time to focus on providing excellent service to your guests.
READ: Guest Payments | An introduction into how to get the best guest experience from before they even arrive.