How Does Hotel Payment Processing & How Does it Work?

Hotel payment processing is the process of authorizing and settling payments for hotel stays. The process typically involves a hotel's point-of-sale (POS) system, a payment gateway, and a merchant account.

When a guest checks into a hotel, the front desk clerk will enter their information into the POS system. This system will then generate a bill for the stay, which the guest will be asked to pay.

If the guest is paying by credit or debit card, the POS system will send a request for authorization to the payment gateway. The gateway will then forward the request to the card issuer (e.g. Visa, Mastercard, etc.). If the card issuer approves the transaction, they will send an authorization code back to the gateway.

The gateway will then forward the authorization code to the POS system, which will then print a receipt for the guest. The guest can then sign the receipt and return it to the front desk clerk.

Once the transaction is authorized, the hotel will submit a batch of transactions to their merchant account provider at the end of the day (or whenever they choose). The merchant account provider will then settle the transactions with the card issuers and deposit the funds into the hotel's bank account.

The entire process usually takes a few days, but can vary depending on the type of card being used and the policies of the merchant account provider.