3. Combat Data Breaches & Automate Fraud Detection
Online booking and shopping have increased dramatically in the post-pandemic era, and so too has payment fraud. According to JP Morgan, approximately 74% of organizations were the victims of actual or attempted payments fraud in 2020 alone, while in that same year, over 115 million credit and debit card details were stolen and posted on the dark web. Technologies such as one-click payments that are designed to streamline the payment process have also made it harder to detect and prevent fraud, while many common fraud techniques are hard to distinguish from legitimate refunds or chargebacks. The issue is how to deploy systems that can reliably detect and prevent payment fraud without unduly burdening the guest experience.
Dealing with chargebacks can also be difficult for hotels. Chargebacks or payment disputes offer customers a way to dispute suspicious transactions and occur when a cardholder contacts their bank to dispute a transaction (instead of going directly to the merchant). The process for disputing a chargeback can be complex, involving coordination between the card issuer, scheme, acquirer, and merchant. While chargebacks are a normal part of business, they are a potential revenue risk and can create significant headaches for hotels if they are made in error. Hotels can reduce chargebacks by preventing fraud (see our section on data security below), avoiding miscommunications, and making refunds easier. Relying on a single payment facilitator can also help streamline chargeback management, handling, and disputing since more of the chargeback’s steps will take place under the same organization.
It’s critical to find a payment facilitator that offers best-in-class data security. At a minimum, your provider should be PCI DSS and GDPR compliant and have ISO 27001 and SOC2 Type 2 certifications. They should employ additional security features such as regular penetration testing by independent parties, data-at-rest encryption, HTTPS encryption in transit, field-level encryption for sensitive data, comprehensive VPN and firewall protection, and active security monitoring and alerting.
They should also leverage advanced AI and machine learning to create nuanced risk profiles to automatically detect fraud attempts and differentiate them from normal consumer behavior. These profiles should include customizable risk rules so that hotels can tailor their risk tolerances to their unique market and customer segments. Finally, it should be stated again that it is more secure to deal with a single trusted provider, rather than multiple vendors with different compliance standards and security protocols. By dealing with a single vendor, you can reduce fraud while also maintaining a streamlined guest experience.
A Single Vendor for a Unified Payment Experience
Relying on multiple vendors on the payment backend can lead to a disjointed and complex payment experience for your guests. Hotels need a single, reliable payment facilitator that offers a fully-integrated end-to-end solution in order to deliver a payment experience that is unified, streamlined, secure, and profitable.
