How much money does your hotel lose through the rise of virtual credit cards?

Few hotel owners are aware of the new rules for online transactions. Even fewer hotels have taken the appropriate measures to facilitate these new financial flows. This means that they run a very real risk of missing out on payments that are made via booking websites. Want to know whether your payment process is watertight and if you’re missing out on money? Then schedule a Payment Scan: in a video call, one of our consultants will carry out a quick and obligation-free analysis that can highlight areas of improvement for your business process.

The new rules for online transactions have been in effect since January 1st 2021 and are the result of the European PSD2-guideline (Payment Service Directive 2). One of the consequences is that online transactions must conform to Strong Customer Authentication (SCA). 


Booking guarantee

Booking and payment by credit card is the most common method in the hotel industry. Among other things, as a guarantee and down payment for the booking. In practice, it turns out that this method is now worthless to hotels because they can no longer process the credit card payment themselves. Guarantees for credit card payments are still required. However, when it actually matters, a hotel can’t make use of the card number: the guest still has to approve the second verification. If they fail to do so, you can forget about taking payment for the booking.

You might expect hotels to have experienced this problem by now but many don’t seem to have noticed, perhaps as a result of the declining number of reservations as a consequence of the COVID-19 crisis. Many entrepreneurs still rely on the validity of credit card guarantees.


Virtual credit cards

In response to the new regulations, many booking sites have implemented virtual credit cards. They charge the guest’s credit card, thereby making use of two-factor authentication. After that, they sent a virtual card number to the hotel as a payment method that doesn’t require SCA. This card functions as a kind of coupon: the hotel can use it to claim the payment. Commission fees have already been subtracted from the amount they can charge. However, danger lies in this process: the charge can only be made in a predetermined period of time. After this period, the card number becomes invalid, meaning that hotel owners can no longer complete the transaction. So, it’s important not to forget to take the payment, but an entrepreneur may have other things on their mind.


Covered risks and reduction in administrative procedures

Customers who make use of our SmartCONNECT for Payment system can cover this risk. Our system enables them to have the payments claimed automatically on the day that is linked to the virtual credit card payment.

The SmartCONNECT solution ensures that payments by hotel guests are made quickly, safely, and in a way that is guest friendly. One press of the button allows both online and offline payments to be automatically charged by the payment service provider. Moreover, the payments are immediately registered in the hotel’s own PMS system.

Not only does this reduce financial risks, but it also reduces the amount of necessary administrative work. For example, copying out the guest’s credit card information is no longer necessary. This allows our customers to reduce the number of administrative employees needed by two.

Payment Scan analyse


About SmartHOTEL 

For more than 16 years, SmartHOTEL has been helping hoteliers navigate the exciting world of online distribution. From our office based in the Netherlands and the United Kingdom, our team serves independent hotels, hostels and chains worldwide by providing channel management and tailored online distribution solutions. A lot has changed over the last years, but our goal remains the same: simply connect hotels to the world. For any questions regarding our services, please contact us at or call +31 (0)182 75 11 18


By Quinten Gazendam | May 11, 2021

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