New European payment regulation
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A new European payment regulation was enacted in 2018. This regulation, called PSD2, concerns digital payments and will come into force definitively on January 1, 2021.
It will bring a real revolution within payment systems.
In fact, it will no longer be possible to cash in hotel reservations with the classic manual pan, in the event of the customer's absence at reception.
The risk is to be overloaded with denials and refund requests, even if the customer takes advantage of the stay.
PSD2 concerns the regulation of the management of payments and online payment systems within the European Union and will be enforced through Strong Customer Authentication (SCA).
This system allows the payment provider to identify the customer who booked with at least two factors: a code that only he knows, something that is only in his possession, such as a hardware key or smartphone, and biometric recognition , i.e. face ID or touch ID.
New European payment regulation: advantages
But let's look at the advantages of using a PSD2-compliant payment gateway. First and foremost, fraud prevention and time savings. A payment gateway connected to the property's PMS can independently manage hotel booking flows.
Reservation payments include deposits, pre-authorizations, pre-payments, and payments themselves.
Another advantage is integration with a physical POS . A payment gateway connected to the hotel's PMS can optionally be integrated with the physical POS and complete an online booking that was previously only pre-authorized. This way, the payment can be settled directly at the reception desk.
Those who have not integrated a connection with a PSD2-compliant payment gateway will need to request tokens proving SCA, along with payment details. This applies only to bookings received from OTAs, CMs, BOLs, and offline booking channels.
Without this proof, the hotel will not be entitled to charge any amount to the credit card of the booking guests, not even a pre-authorization, and the customer's bank may refuse the transaction or accept a refund request made by the cardholder.
This procedure will begin from 1 January 2021.
It is therefore advisable to obtain a PSD2-compliant payment gateway before the date set for the definitive entry into force of the legislation.
