Refusing to accept online payments is bad for business. Not only do your customers prefer to pay for goods and services online, but manual payment processing slows down your cash flow and is an administrative time suck.
It reflects well on you when you have a secure online payment system on your website. Your customers get an excellent experience, and it gives them confidence that you know what you’re doing.
Here are the 3 keys to accepting online payments for your tours and activities.
Key #1 Online booking system
In terms of online payments, your online booking system is what will allow your customers to browse and select your products.
Understand the difference between custom-built and ready-made booking software
Custom-built software can be created specifically for your company by a development professional. This is the most expensive option, but if your tour company is large enough it might be worth the investment.
Software that is already designed and ready to go is often the easiest way to implement an online booking system. This software is designed to address the general needs of most tour company operators, so it is often a convenient choice that is very functional at the same time.
For more information, download our Buyer’s Guide to choosing the best booking software for your business.
Understand the difference between commission based and fixed fee online booking systems
It’s important to note that there are two types of paid online booking systems:
- A fee-based system is going to cost you a set fee every month, no matter how many bookings you make.
- A commission-based system will take a percentage of your profit every time you have an online booking.
If you’re interested, we’ve actually developed a Pricing Calculator which asks you a series of questions before displaying your annual costs with Rezdy’s system vs. a commission-based booking system.
Key #2 Merchant account
A merchant account links a customer’s credit account to your business’ bank account. This will let you accept debit and credit card payments.
Understand your different options
- Banks. Although banks do provide merchant accounts, they are highly regulated and generally unhelpful for tour operators who are just starting out. This is because banks will either reject or charge a higher fee for businesses with high possibility for returns and refunds.
- Credit card companies. Small businesses usually get their merchant account through credit card companies, and not their business bank. Credit card companies will either set up merchant account processing, or ask you to use a third party processor (this is the case for Visa and MasterCard).
- Third parties. Small-sized businesses typically need to go through third party providers to secure the merchant account. One example is PayPal. They collect customers’ data and do all the work to process payments for your business.
- Deferred payment processing. If you don’t want to use a merchant account, you can use a deferred payment processing system in conjunction with your point of sales (POS) system. Rezdy Vault is one example. It’s not a payment gateway, but it provides credit card authorisation which is secure and can be used with your POS system.
Understand the costs involved
- Application fee
- Per transaction fees
- Monthly minimums
- Discount rate
For more information on merchant accounts, click here.
Key #3 Payment gateway
Online payment gateways work with your merchant account and online booking system to allow instant credit card authorisation for people who want to buy your product or service online.
Because you’re dealing with money, there are quite a few things to consider in order to determine which payment gateway is the best fit for your business.
- A consistent customer experience. The experience between the booking system and payment gateway should be seamless. If they have to be taken to a hosted payment page, at least make sure the look & feel can be customized so that it’s a consistently smooth, professional experience.
- Currency compatibility. Some gateways charge a fee for converting currencies. This can get very costly in the long run. Make sure that they will accept your home currency without any added costs.
- Solid security. If your data is compromised, you look bad and your customers lose trust. Can your payment gateway provider tell you how they will make your customer’s data safe? They should be able to detail what they do with your customer’s data (ie. what data they store and how long they hold it for).
- Excellent support. You’re dealing with your customer’s money, so paying that little extra for more support is definitely worth it. You need to know that you can count on them if things do go wrong.
For a list of online payment gateways that work well for tours and activities, click here and here.
Looking for a way to process online payments for your tour business? Rezdy has processed well over $100M in booking revenue to date. Contact us to find out how we can help you.