Campgrounds, hotels, motels and restaurants are businesses that often take reservations. Many of these businesses take a credit card with the reservations. There are some complications to doing this:
- Generally reservations are phoned meaning that they are often entered manually (card not present) resulting in considerably higher fees and greater fraud liability.
- Businesses are not supposed to store credit card numbers (observe this rule far too dangerous to store credit card information)
- You may not have a total to enter if you want to enter the sale manually.
- You can pre-qualify a transaction which puts that money aside for you but it only lasts for 30 days.
- Some businesses have large seasonal payments where the client pays periodically on a regular basis making it necessary to get the credit card information for each transaction, enter it then destroy it.
There are ways around the above complications that most hotels have already figured out. In order to do this properly you must have a “virtual terminal” processing account, basically an online program you sign in to enter credit card transactions and store credit card information. The advantage to this is you can store credit card information for future use on the processor’s server (no culpability for you) and have access to it for future transaction(s). You can also take a reservation enter the credit card number into the virtual terminal then when you are within the 30 day window enter a transaction for pre-approval. You can then enter the sale with the card present when the customer arrives or enter a fee according to a pre-disclosed policy if they don’t show up. Some things to be careful of when setting this up.
- Some processors will insist upon a separate account for the virtual terminal and will not let you have a conventional terminal on the same account. This means you will either have to relent and have two account with extra expense or attach a pin pad to your computer making it necessary to sign on to the app every time you do a sale. Pick a processor that will let you do it all with one account.
- The processor may charge different fees for a virtual terminal transaction the most common being per transaction fees from $.03 to $.15 per transaction.
- Make sure your policies are clear to your customers, if they cancel past a certain date they will be charged $XXX. You will be doing a transaction to pre-approve their credit card (this amount goes against their credit availability as a pending transaction). If you are doing recurring payments it is wise to have the customer acknowledge this, dates and amounts. Most virtual terminal programs will automatically send confirmation to both the customer and the merchant of recurring transactions when they occur.
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