– Switching to automated online payments will save you real money over the long term.
– Higher headline rates are more than offset by productivity savings in your front and back office and by the drastic reduction in chargebacks and fraud.
– Try our calculator to see how much you could potentially save.
Processing payments manually is the single biggest drain on time and manpower for any hospitality operation. It’s safe to say that moving from offline payments to automated online payments is already future-proofing properties and it’s something we have been banging the drum about recently with our Mews Merchant. As consumers, we are so used to those seamless Uber and Amazon payment experiences already but why has hospitality been so slow to adopt automated online payments?
Curious to find out how the Mews Merchant is transforming properties?
At the end of the day, it boils down to the numbers and when most people see a higher up front transaction rate/fee for a new payment solution, they too often judge the book by its cover and shy away. But they would be wrong. They don’t look beyond the surface to the unprecedented amounts of time and manpower, not to mention the drastic reduction in fraud cases, that can be saved and that more than outweigh the marginally higher transaction rate for these new solutions.
So, to help make our case, we decided to build a calculator to give you a glimpse into the world of the Mews Merchant and the many ways in which it can help you save money, time and labour. Have a play below.
Night Audit savings
Without the Merchant you need a night auditor every night to handle the guest ledger from the day. However, the Merchant makes the night audit process unnecessary as this is now automated, allowing you to be more sparing with your night team.
We have assumed that your night auditor doubles up on the front desk but receives a higher wage (€25,168 – converted to euros and inclusive of non wage labour costs) than the average receptionist (€22,027 – same as above).
Due to standard practice, two staff are needed at night, so the Mews Merchant would allow you to downgrade a night auditor to a standard receptionist and get rid of any surplus.
Take the example of a night shift consisting of one receptionist and two night auditors. With the Merchant, you would be able to save €39,760 annually by following the above process. This would leave you with two members of staff, which is legally required at night in a hotel.
Reservations Department savings
The Merchant helps reservation managers cut down the amount of time they spend handling reservations and therefore, on an hour-by-hour basis, it will save you on the associated costs.
The full manual process for a reservations manager when handling a booking involves slow procedures including checking the booking into the PMS and charging the card manually at a PDQ machine for non-refundable bookings. By accounting for potential mistakes (e.g. incorrect entry on PDQ), we make the assumption that it takes five minutes for one booking to be handled.
Under the Merchant this process becomes simple. The system pulls the booking to the PMS and handles the charging of cards for any non-refundables. A reservations manager therefore only has to manage offline bookings once the Merchant is in place. Even though it takes zero minutes for the process, we have included a small amount of time as a margin of error.
The Mews Merchant is incredibly effective at streamlining the checking-in and checking-out process. We again look at this cost on an hourly basis, with the average receptionist receiving an annual wage of €22,027. The Merchant removes the need for card handling and the inputting of card details. See it in action:
Evidence from our current users shows that check-in time at a non-Merchant hotel to be around five minutes and the check-out time to be around three minutes. For similar Merchant hotels the check-in time was around two minutes (have a look what Hotel2Stay had to say) and the check-out time was just one minute. This means, on average, for one booking, a receptionist spends 7.8 minutes for a non-merchant hotel and only three minutes for a merchant hotel.
Looking at it as a whole you will find substantial productivity savings in your front office.
Chargebacks and fraud reduction
Currently the average Mews Merchant property experiences a chargeback rate of 0.21%. This is a reduction of 60% from our average non Merchant hotel and is courtesy of Stripe’s powerful fraud detection tech.
Security first with online payments
Applying this to a 50-room non Merchant hotel with an average room price of €100, the average loss to chargebacks would be €574. For a Merchant hotel the average loss is only €229. Over the course of a year this adds up to €4133 in revenue that you would not lose if you were using the Merchant.
This calculator only accounts for the processing fee that is paid when a card is used and does not account for the interchange nor the scheme fees.
Who's afraid of payment automation?
The Mews Merchant processing fee works like a variable which changes dependent on expected level of monthly transaction volume, which we account for in this calculator. We also account for the €0.20 charge there is for card storage in the Merchant by estimating the amount of cards stored per month.
The headline rate you see with the Merchant will generally be higher and you will lose money in comparison to many other processing fees. But this is more than made up for by the savings you make elsewhere.
Disclaimer – The rate we use for our calculations does not include an interchange fee or a scheme fee. Therefore this is not a blend fee as these are stripped out. When using the calculator please ensure that you only input your card processing fee for accurate results. If you would like to learn more about interchange fees please head to: