Deepak Neupane, Kathmandu : A growing number of hotels around the world, particularly in the UK and Ireland are now accepting international money transfers over traditional credit card payments. Popular hotel review websites are filled with cases of guests wanting to know if wire transfer deposits are a legitimate form of making payments for their hotel accommodations. In fact, the growing popularity of wire transfers for hotel reservations is a win-win for hotels and customers alike.
To understand the merits of wire transfer services over traditional credit card deposits, it’s important to consider the charges levied on hotels and customers when using credit cards. The main credit card companies include Visa, MasterCard, American Express, Diners Club International, and Discover Card. Hotels, like other merchants, have many options available when it comes to banking methods. Credit cards are universally popular, and so they are globally accepted. However, credit card fees invariably cost a mint.
While the fees will vary between credit card processors, there are also interchange fees that must be taken into consideration. This comprises a flat fee + a percent of the overall purchase price. There may also be additional fees such as merchant services companies which act as middlemen between your credit card provider and the merchant. They also take a chunk of change from the transaction. On a typical £100 charge, the charge may be £2.50 – £3.00, depending on the credit card provider in question. In the days of old, merchants like hotels had no option but to accept the charges associated with credit card fees. In the US today for example, most states now impose a surcharge up to 4% on the purchase price which gets passed on to customers. Customers may not appreciate a high surcharge when making purchases on the credit cards, particularly when they are on vacation.
In the hotel industry, high turnaround rates are commonplace. American Express for example charges its own rates, and therefore it doesn’t matter which credit card processor you’re using – the rates you pay whenever you swipe an AMEX card are always the rates charged by this credit card provider. Many smaller businesses simply don’t accept American Express because it is simply too expensive. As such, a myriad of transactions is going to be processed, and each of them is subject to fees and other charges. Hotels may be doing themselves a disservice at some level by restricting their range of banking methods to credit cards alone. A more beneficial approach might be including wire transfer services since these are not subject to credit card fees.
