Hotel Back Offices integrating their accounting systems with Virtual Card Numbers (VCNs) are providing millions of travelers with quick and easy service. Here you'll find all the answers to your hotel back office questions about how virtual cards work and how to ensure smooth transactions for all of your guests.
What is a Virtual Card Number (VCN) and why is it important?
The VCN is a credit card number specially designed for single-use payments. VCNs are becoming more popular because they offer secure real-time payments and automatic reconciliation. Even better, VCNs are accepted at all existing Mastercard and Visa terminals worldwide.
More and more travel intermediaries are opting to use virtual payments instead of traditional payment methods (like Wire/ACH/Check). The VCN provides a convenient and risk-free way for travel providers to secure and pay for individual travel reservations on behalf of their customers.
How do VCN payments benefit hotels?
These Virtual Card Numbers make payments simpler, smarter, and more secure.
Reduces the cost of overseas payments
- When you receive overseas payments in your local default currency via a VCN, you can avoid the fees associated with accepting payments in a different currency. Not only that, but VCNs also reduce the necessity for an added layer of processing that comes with accepting cross-border payments. Overall, this can simplify your back-office functions.
Reduces the risk of fraud
- Because VCNs are designed as single-use payments, controls can be set to reduce any risk of fraud. These controls include card limits and hotel stay start and end dates – all specifics that can help link one VCN with one personalized guest hotel stay. Also, there are never any customer credit card details passed along to your hotel, which greatly reduces the chance of a data breach.
Your payments are received faster
- VCNs provide faster, earlier payment processing and, therefore, help facilitate dynamic inventory hotel pricing.
What does the transaction process look like?
A VCN is automatically sent to your hotel when a booking is confirmed through a travel company. This unique single-use VCN is specific for payment of that booking only.
In the payment instructions, you will find the date the VCN should be charged, which in most cases, is when the guest checks out. On prepaid accounts, the VCN is charged at the time of reservation. Here is a quick overview of the process.
Travel Company Makes Reservation >> Travel Company Requests VCN >> Supplier (hotel) Charges VCN >> Transaction Reconciles Automatically >> Travel Company Settles with WEX.
What can hotels do to ensure VCN payments run smoothly?
- On Booking: Make sure you receive a unique account number with the booking information when a guest makes a reservation with a VCN.
- On Arrival: Check in the guests as usual and prepare two folios:
- Guest Folio 1 (Guest Credit Card) for guest incidentals they pay directly. Be careful not to overwrite the VCN with the guest’s credit card.
- Guest Folio 2 (Virtual Card) for net room rate and tax (and any applicable fees). If you require a pre-authorization, the VCN may be authorized upon guest arrival. Keep the approval code and apply it when settling the charge.
How can I help ensure a smooth front desk check-out?
Make sure that you are charging the VCN that was received for that specific booking and to apply the approval code, if necessary. You will process this as a card-not-present transaction.
Also, confirm that the pre-authorization and transaction settlement are based on the “guaranteed” type and that the deposit/cancel rule is associated with the reservation. These extra check points will help you avoid unnecessary and unfortunate pre-authorization declines that can come from the automated background jobs in your Property Management System (PMS).
What if the hotel does not receive the VCN with the booking notification?
If your hotel does not receive the VCN with the booking notification, please contact the travel company’s support team for information on retrieving the number.
Is there any reason to keep the guest’s credit card once the VCN is logged in?
Yes, in addition to the VCN, the guest’s credit card will always be kept on file during their stay. The credit card is typically used to pay for incidentals, unless otherwise noted, and should not be overwritten by the VCN.
Can one VCN be used for all guests that check out in a group on the same day?
Yes, if all guests are part of the same booking, then you can use the unique VCN that was sent with the booking confirmation. If guests are part of different or individual bookings, please use Separate VCNs.
Can a VCN be charged after a guest has checked out?
A good rule is to always double check the charging dates for a VCN that are included in the payment instructions. The VCN’s charging dates are preset and specified in these instructions.
What currency should the front desk use for payment?
Your hotel charge settlement will always be taken in your local default currency, unless of course there is a note in the payment instructions with a request for a different currency.
What if the VCN is declined? Why does this happen?
In many cases, a charge will be declined if the VCN was authorized at the time of check-in. If this happens, the transaction can be processed by using the pre-authorization code that was given at the time of check-in. If you did not keep a record, you can contact the travel company’s support team to request that code.
Note that your system may already store the authorization code. You can refer to your system’s reference manual for more information on how it processes authorizations and transactions.
Can the hotel charge the guest’s credit card if they run into problems?
In most cases the guest has already paid the travel company for the booking. Instead of charging the guest, please contact the travel company’s support team to resolve the problem, and always allow the guest to check in or check out while you are resolving the problem.
What about cancellations or refunds when a guest uses a VCN for payment?
Cancellations are charged to the VCN based on the hotel’s cancellation policy. To process a refund, pull up the reservation and reverse the charges. When processing through the card terminal, the refund works exactly like a credit card. The charge can be looked up through the authorization number and by choosing either refund/reverse or by entering the VCN as a negative amount. Refunds on VCNs can be processed even if the VCN has been closed.
To ensure successful transactions, here are a few questions you can ask yourself:
- Are your pre-authorization and transaction settlements based on “guaranteed” type and the deposit/cancel rule associated with the reservation? This will avoid unnecessary pre-authorization declines from automated background jobs in a PMS.
- Are reservations set as Guarantee Credit Card (GCC) instead of Full Prepay in the PMS? This will reduce the false/positive alerts on declined authorizations.
- Are pre-authorization codes submitted with subsequent settlement transactions?
- Are two folios created – one for company charges and the other for guest incidentals? Partial Payments and/or refunds can be processed if they do not exceed the total authorized amount.
- To process a refund, are the reservations pulled up and the charges reversed? When processed through the card terminal, the refund works exactly like a credit card. The charge can be looked up through the authorization number and by choosing either refund/reverse or by entering the VCN as a negative amount.
- Is the settlement in the property’s default currency?
Is your hotel back-office ready to process VCN transactions?
Learn more about how WEX travel payment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.