PSD2: Are you ready?

Webinar PSD2 GuestPro

Here you have the recording of the webinar that we did with the participation of some hotels.

PDF Presentation PDS2

View PDF presentation PSD2 GuestPro

PSD2 (Payment Services Directive) is the European Directive regulating payment services.

• Entry into force on 31 December 2020
• It makes it very difficult to guarantee bookings by card
• The hotel sector will be strongly affected

SCA (Strong Customer Authentication) payments will have to be validated by the user (POS in secure mode).

• Charges against cards will no longer be possible
• Early cancellation and no-show penalties are affected.
• There are exemptions but they imply a major change in operations.
• Virtual cards issued by Booking.com and other OTAs can still be charged with a physical dataphone.

Virtual Cards

• Hotels will no longer receive cards from customers but VCs.
• The customer will pay the OTA, the hotel will receive a VC from the OTA.
• OTAs will be able to decide how and when to charge the customer.
• As it is no longer possible to charge cards with a physical dataphone, it will only be possible to charge online via virtual POS.
  

Virtual POS with 3D Secure

• Web bookings: on-the-spot charging of deposits and NR
• Direct and OTAs not guaranteed: sending payment links to the POS.
• Technology tools will need to assist the hotel in automating payment requests and processing them for confirmation or cancellation of bookings.
• It will be very difficult to stay competitive when OTAs can offer non-prepaid bookings and the engine cannot.

Booking without deposit

• Customers will book where they find it easiest
• Virtual POS does not allow for deferred payments.
• Fortunately, hotels will be able to take advantage of the MIT exemption.

MIT (Merchant Initiated Transaction) allows deferred charges to be made to cards with the customers' permission.

• Used to charge subscription services (Netflix).
• Prior SCA authentication of the customer is required (€0 charge)
• It is only possible to process charges programmatically, so the Virtual POS must be webservice enabled.
• Allows the hotel to make charges programmatically by sending the payment data from server to server (without user interface).
• 
  

Virtual POS with webservice

• It can be used to charge from the engine, PMS or channel.
• It is the only option to guarantee web bookings without deposit.
• Requires a PCI-DSS provider with Redsys integration for the bank to grant permission for webservice Redsys is the card payment processor used by practically all Spanish banks (the Renfe of payments).

Redsys

• The bank's virtual POS is provided by Redsys.
• It includes the public payment page and the "administration module".
• It is the cheapest option for the hotel, with costs similar to the physical POS (can go below 0.4%).
• There are suppliers on the market that facilitate the operation with Redsys and improve their tools and support.

Other payment platforms

• Addon Payments (CaixaBank), Paycomet (Sabadell)...
• There are also other options that do not operate on Redsys but charge the client and transfer the money to the hotel (Stripe, Paynopain...).
• They are not as economical for the hotel, but they are the only option when the providers (engine/PMS/Channel) are not PCI-DSS or do not have webservice integration with Redsys.

Summary

• Technical difficulties are introduced
• technical difficulties in securing bookings via card data are introduced
• OTAs will have an advantage as long as hotels cannot adapt to the new reality.
• Always with prepayment: we lose competitiveness vs. other more prepared hotels.
• POS with webservice: it is a tedious process with banks and suppliers who are not prepared, but it can be done.

Our recommendation: POS with webservice + SCA for web bookings and payment links. This option allows us to maintain current payment policies in the hotel, and is the most economical of the options on the market.