The global hotels market was worth almost $1.4 trillion in 2023, and it’s predicted to grow to nearly $3 trillion by 2032. Running a hotel means dealing with room inventory, service standards, staffing, compliance, and efficient payment flows. Today’s guests expect to pay with whatever’s in their pocket—or phone—and with payment methods popular in their home countries. As a result, hotel payment processing has to match that level of flexibility without being a drain on your operations.

Below, you’ll find a practical look at how hotel payment systems work, which payment methods guests expect you to accept, and how to build a payments infrastructure that’s secure, scalable, and helps modern hotels run more efficiently.

What’s in this article?

• What is hotel payment processing?
  
• What payment methods should hotels accept?
  
• How do online payment gateways work for hotel bookings?
  
• How to choose a hotel payment processing provider
  
• Best practices for hotel payment processing
  

What is hotel payment processing?

Hotel payment processing refers to how you accept and move money from guests into your bank account, whether that’s by running a card at the front desk, through an online booking, or with a room charge during their stay.

Hotel payment processing systems authorize payments, move funds, handle refunds, and tie every transaction back to a reservation. Many guests choose to pay with cards or digital wallets, which means hotels are navigating a flow of approvals, holds, and settlements through payment networks and banks.

Here’s how the process works:

• When a guest pays with a card, your payment processor connects to the card network (e.g., Visa, Mastercard) and the guest’s bank.
  
• If the issuing bank approves the transaction, the money moves to your hotel’s account, less processing fees. That money first sits in a merchant account, then transfers to your bank on a set schedule.
  
• If you’re holding funds for incidentals, the processor also handles preauthorizations by placing a temporary hold on the card to be finalized or released later.
  
• If a refund or cancellation happens, the processor handles the return flow of funds.
  

This whole system has to work in sync with your other software, including your booking engine, property management system (PMS), and accounting tools. Otherwise, you’re left with additional manual work and gaps in your records.

What payment methods should hotels accept?

In hospitality, you want to make booking, check-in, and check-out as easy as possible. That means taking care to accept the payment methods your guests use the most. Here’s what to include in your hotel’s payments mix.

Credit and debit cards

Card payments are still the default choice for many guests, especially those traveling for business. Your business needs to accept all major card networks—both online and in person. At the front desk, your terminals need to support chip-and-PIN, swipe, and contactless payments. Online, be sure to use a secure gateway and additional fraud checks to accept card-not-present (CNP) payments.

Digital wallets

Digital wallets such as Apple Pay, Google Pay, and Samsung Pay are widely used, particularly in mobile checkout. They allow guests to skip manual card entry—which speeds up bookings—and use tokenization and biometric verification to reduce the risk of fraud. Make sure your hardware supports near-field communication (NFC) technology so you can accept these payments.

Buy now, pay later (BNPL)

BNPL is becoming increasingly common across travel, particularly for high-value stays or vacation packages. It lets guests book today and split payments over time—often interest-free. Accepting BNPL can increase your average order value and reduce price-related drop-offs at checkout.

Your processor or booking engine might already integrate with popular BNPL providers, such as Klarna or Afterpay (also known as Clearpay). Choose one that fits your market and booking volume.

Direct debits

Direct debits through networks such as Automated Clearing House (ACH) in the US and Single Euro Payments Area (SEPA) in Europe are often used for corporate, government, or group bookings. These payments have lower transaction costs for large sums, and they aren’t subject to chargebacks, so they’re a good choice for conferences, block bookings, and long-term stays. If you offer direct debits as a payment option, you’ll need a workflow for matching payments with reservations and ensuring funds have cleared before check-in.

Local payment methods

What’s common in one country might be unfamiliar in another. If you serve international guests, offering region-specific payment options can build your credibility and put customers at ease. In Europe, that might mean accepting iDEAL, Sofort, or Przelewy24. In Asia, that might entail Alipay, WeChat Pay, or FPX. In Latin America, Boleto, Pix, and OXXO are all popular. The more familiar the payment experience feels to your guest, the better.

Cryptocurrency

Crypto payments are still niche, but some hotels now accept Bitcoin and other digital currencies. These are more common with technologically inclined or privacy-minded guests, so consider it if your brand caters to younger or crypto-savvy audiences. However, since accepting cryptocurrency means dealing with volatile exchange rates and regulatory uncertainty, make sure you partner with a processor that handles conversion and helps support compliance.

All these options need to be integrated with your booking system and PMS so charges are accurate, traceable, and easy to reconcile. Supporting a wider range of payment methods is only worthwhile if your systems can keep up.

How do online payment gateways work for hotel bookings?

An online payment gateway is the tool that connects your hotel’s website or booking engine to the financial networks that approve and move money. Some payments providers bundle the gateway and processor together, while others separate them.

Here’s what a payment gateway does during booking:

• A guest chooses a payment method and enters their payment details.
  
• The gateway encrypts that data and sends it to the payment processor. The processor forwards it to the customer’s bank for authorization.
  
• The bank approves or declines the transaction—a message that’s communicated back to your site within seconds. If approved, the funds are set aside by the guest’s bank.
  
• Once the reservation is confirmed, the transaction is “captured,” which means the acquiring bank initiates the actual transfer of funds.
  
• Those funds arrive in a merchant account, where money lands before a payout to your hotel’s bank account. Depending on your processor, payouts can be daily, weekly, or on a custom schedule.
  

Modern gateways also handle:

• Preauthorizations: Placing a temporary hold at check-in for incidentals or deposits
  
• Refunds: Returning funds to the guest if plans change
  
• Charge adjustments: Finalizing or updating charges at checkout
  
• Tokenization: Storing a secure version of the card so it can be reused without re-entering details or exposing raw card data
  

A payment gateway needs to be tightly integrated with:

• Your booking engine, to automatically trigger charges when a reservation is made
  
• Your PMS, to link charges, holds, and refunds to the guest folio and reservation
  
• Your accounting software, to match and reconcile each transaction
  

How to choose a hotel payment processing provider

Your choice of a payment processor affects almost every part of your operations: guest experience, accounting, compliance, and even staff workload. Let’s consider what you should look for in a provider.

Transparent pricing

Start by making sure you understand how you’ll be charged. Pricing could include flat, per-transaction fees or interchange fees, also known as cost plus pricing. Some providers might charge monthly minimums, security compliance fees, or batch processing fees. High-volume hotels might be able to negotiate better terms, so check if there’s flexibility.

The cheapest provider on paper isn’t always the best value if the platform is harder to work with, charges hidden fees, or lacks comprehensive support. Look for pricing that fits the services you actually use.

Payment methods supported

Make sure the processor supports all the ways your guests want to pay, including:

• Major credit and debit cards
  
• Digital wallets
  
• Local payment methods
  
• BNPL options
  
• Direct debits
  

Multicurrency and cross-border support

Multicurrency support affects how global guests perceive your brand and how easily you can operate across markets. If you serve international travelers, make sure your processor is set up correctly. Can guests see prices in their home currency? Can you accept payments in multiple currencies and get payouts to your local bank accounts? Is currency conversion handled automatically, or is it a manual step?

System integrations

Your processor needs to play well with your existing tools, including your PMS, booking engine, and accounting software. Avoid providers that require workarounds or double entry. The more your systems talk to each other, the better everything will run.

Security and compliance

At a minimum, your provider should be Payment Card Industry Data Security Standard (PCI DSS)–compliant and help reduce your compliance burden. You also need to look for:

• Built-in antifraud tools, such as address verification service (AVS) and card verification value (CVV) checks
  
• Support for local rules, such as Strong Customer Authentication (SCA) requirements in Europe
  
• Evolving detection models (e.g., machine learning infrastructure that can adapt to shifting fraud patterns)
  

Reporting and support

Make sure you can see real-time transactions, payout timelines, fee breakdowns, and department-level performance.

Ideally, you also need to have 24/7 access to both technical support and hospitality-aware support. They should understand what it means when a guest’s preauthorization is stuck or a corporate card gets declined at check-in. Helpful, timely answers matter, especially when you’re responding to chargebacks or payment exceptions.

Experience with hospitality

Finally, choose a processor that understands hotel workflows, including how to handle preauthorizations for room holds, issue partial refunds, and manage tips, group bookings, and split payments.

Hospitality is full of edge cases. A processor that’s built for the industry won’t force you into generic payment flows that don’t fit the way your hotel actually operates.

Best practices for hotel payment processing

In hospitality, where payments span preauthorizations, add-ons, and last-minute changes, a few strategic practices can help you prevent chargebacks, reduce fraud, and deliver a better experience for guests and staff alike. Here’s what effective hotels do to stand apart with their payment processing.

Use tokenization for storing card details

Never store raw card data. Instead, use a system that converts it into secure tokens. That allows you to charge for incidentals, upgrades, or damage fees after checkout without exposing your hotel to unnecessary security risks.

Be upfront about preauthorizations and holds

If you place a hold on a card for damages or incidentals, say so early. Let guests know when they’ll see the hold, what it covers, and when it will be released. Miscommunications here can lead to disputes.

Quickly release unused authorizations

Once a guest checks out and the final charges are posted, release any unused portion of the preauthorization immediately. Many processors do this automatically, but not all do.

Keep clean records of every transaction

In the event of a chargeback, your best defense is documentation. That can include:

• Signed registration forms
  
• Authorization receipts
  
• Timestamped folio activity
  
• Guest acceptance of cancellation and refund policies
  

Make sure this information is easy to retrieve, either through your PMS or processor dashboard.

Use clear billing descriptors

The line item that shows up on a guest’s card statement needs to match the name they associate with your property. Avoid corporate holding names or abbreviations that make the charge unrecognizable. Explicit billing descriptors help avoid confusion and unnecessary disputes.

Monitor your transaction data

Regularly review your payment reports. Look for patterns such as:

• Unusual charge amounts
  
• Repeated declines from the same card
  
• Manual overrides from staff
  

Monitoring for these anomalies helps flag fraud attempts, technical issues, or internal misuse before they escalate to revenue problems.

Train your staff on secure payment handling

Make sure everyone who handles payments knows the basics: don’t write down card numbers, don’t email payment information, verify identification when needed, and never override systems without a record. A few consistent behaviors can make a real impact.

Have a response plan for payment incidents

Draft a plan that details the protocol if there’s a breach, suspected fraud, or system failure. Who investigates the incident? Who communicates with the processor, the bank, or the guest? Who locks down access? Don’t wait until an issue arises to answer these questions.

Layer your fraud prevention tools

Use the antifraud tools available: CVV checks, address verification, 3D Secure for online bookings, Internet Protocol (IP) geolocation, and velocity rules. Once onsite, be sure to match the card name to the guest’s ID at check-in. One layer of security won’t catch everything, but several together usually will.

Automate where it reduces risk

Automated workflows can provide a safer environment. When your booking engine, PMS, and payment processor are connected, charges are applied and recorded automatically. Refunds and adjustments happen in-system, with audit trails.

Make it easy for guests to pay

Let guests pay through links, portals, or apps—especially for prepayments or group bookings. Eliminate unnecessary friction, such as repeated card entry or clunky mobile forms. The easier the experience, the fewer mistakes and chargebacks.

The goal is a system that runs in the background, protects your business when something goes wrong, and supports your team in providing guests with a great stay from check-in to check-out. Learn how Stripe Payments can help simplify your payment and reconciliation processes.