Here's a Simple way to Satisfy Your Hotel Guests

Published: 29th July 2010
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Any successful hotel doing business today is likely to owe much of its customer satisfaction to the ease and convenience merchant accounts offer. However, even if you're familiar and experienced with processing guest payments with a merchant account, you may be missing out on a plethora of special services that could make your life simpler and your hotel more profitable.

Before investigating further options for your hotel's merchant account, it's a good idea to learn the basics of how these accounts work. Take a few moments now to learn about how merchant accounts work and how yours could be working harder for you.

Merchant Account Providers

A merchant account is a specialized kind of bank account, offered only by merchant banks. Merchant banks differ from the more familiar investment banks in that they deal solely with registered businesses. The purpose of a merchant account is to allow businesses to process payments via credit card, debit card or personal check.

These specialized accounts are only available directly from merchant banks or through a third party provider called an independent sales organization, or ISO. Each has its respective drawbacks and advantages, depending on the type of business you operate.

Merchant Banks

The main advantage of establishing a merchant account directly with a merchant bank is the absence of middlemen. Banks are much less likely to charge extra fees for certain services and can offer contracts with significantly less fine print than their ISO counterparts. However, making a deal with a merchant bank can be an arduous and delicate process.

Merchant banks take on a certain amount of risk when agreeing to provide a merchant account. In order to protect their interests, they put applicants through a rigorous vetting process before finalizing the deal. This can make life very difficult for new businesses, as they have a much shorter track record to back them up.

In many situations, even established businesses choose a reputable ISO over a bank, since banks rarely offer the extra services and specialized accounts that ISOs can.

Independent Sales Organizations

The business of an ISO is strictly centered on setting up and maintaining merchant accounts for client businesses. They act as a third party liaison between merchant banks and their clients, taking on much of the risk that banks would normally have to deal with. This means that the process of setting up an account will likely be much simpler, but the tradeoff leaves clients with complicated contracts and, often, hidden fees.

Of course, one of the ways ISOs can charge extra fees is by offering special services and custom tailoring of accounts to suit a particular business's needs. These benefits include, but are not limited to batch settlement, equipment rental and sales, custom service, paper supply storage and sales and other back office duties. This increased service and convenience is enough reason for many businesses to take on a few extra charges.

Before signing any agreements with an ISO, it's extremely important to be sure of its credentials. Any legitimate ISO will have official sponsorship from a reputable banking institution, preferably one that is FDIC insured.

Fees and Charges

Most of the fees charged by a good ISO go toward covering their interests, as their own business is slightly risky by nature. ISOs across the board charge varying rates that are applied to each individual credit card transaction. These rates are determined by the risk factor involved in each type of payment.

For example, a retail merchant account, wherein credit cards are swiped with the card holder present, is considered to be the lowest risk account, so their rates will be much lower than a mail order/telephone order account where card information is entered remotely.

How a Merchant Account Can Work for Your Hotel

The ability to process credit cards has vast implications for a busy hotel. Once guests have made their reservations with a particular card, it may be used to cover all sorts of extras without any hassle whatsoever. From ordering room service to adding extra nights to a reservation, a specialized hotel merchant account simplifies everything for your guests.

Some ISOs also offer additional hotel specific features with their specialized hotel merchant accounts. Popular features include no-show flags, one key re-authorization, and networking so that guests may charge special services to their cards from any point in your establishment, from the front desk to the restaurant or bar to their rooms.

A merchant account is an absolutely essential element in today's hospitality industry, allowing guests to pay for their rooms, services and more with the absolute minimum of hassles. In addition, credit cards can make booking and holding reservations a breeze. Take a few moments now to find out which of the many varied merchant account plans and packages available can help your hotel be the best it can possibly be.

Andrew Kilmeade is a freelance writer who writes about a range of topics including hotel businesses and credit card processing services.


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