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Hotel payment solutions: Clock's In-Platform Payments vs. OTAs

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Managing hotel payments can be a hassle. Online Travel Agency (OTA) payment solutions are popular because they make this process easier. They offer various payment options that cater to guests' preferences and help lower cancellation rates by making bookings more reliable. OTA payment solutions simplify collecting payments and reduce the risk of fraudulent reservations.

Many hotels use these services and enjoy their benefits. However, there are other factors to consider – like high costs, lacking automation, and complicated reconciliation. This article introduces Clock's In-Platform Payment Solution, which retains OTA solutions' advantages but offers better automation, flexibility, and higher revenue.


Downsides of popular OTA Payment Solutions

1. Increased processing cost and reduced net revenue

OTAs typically use virtual credit cards to make payouts to hotels, while guests generally use consumer cards for their bookings. Although OTAs suggest that the cost of receiving a payout via virtual credit cards would replace the fees paid to credit card companies, this isn't entirely true.

Interchange fees, which include components passed through to payment processors by card brands like Mastercard and Visa and encompass the fees of the financial institutions issuing the real or virtual cards, are notably higher on virtual cards than consumer cards.

For example, in regions like the EU/UK/EEA, consumer card Interchange++ fees might be capped at around 0.3%. In contrast, virtual cards can attract fees in the ballpark of 3%, leading to significantly higher costs for hoteliers despite the convenience of automation.

2. Complicated reconciliation and payout control

OTAs have attempted to counter the high costs of virtual credit cards by introducing batch payouts via bank transfers. While this might reduce processing costs, it introduces the cumbersome task of reconciliation.

These reconciliation tasks include the complex process of matching the OTA's payout statement entries and posting them to update each booking folio – a time-consuming task, especially for hoteliers with significant OTA bookings.

3. Partial automation

While OTAs' payment solutions automate the initial booking payment, they still require hoteliers to manually charge virtual cards and update booking folios. Manually processing virtual cards means partial automation, which adds unnecessary time and effort to their workflow.

Hoteliers must also address payment processing and reconciliation for direct booking channels separately, adding more layers to their daily operations and complicating their payment management process. This manual task will persist without a payment solution integrated into the Property Management System (PMS).

Clock's in-platform payment solution automatically manages virtual credit card collection. It collects the amounts on the dates when the virtual cards are unlocked for billing and updates the booking folios accordingly, streamlining the entire payment process.

4. Limiting guest journey

Outsourcing payments restricts hoteliers from enhancing the guest experience. How can they effectively offer room upgrades and extra services or process final payments and damage guarantees when payments are outside their control?

Upsides of Clock's In-Platform Payment Solution

1. Holistic automation

Clock automates the entire payment process across all channels and from within the hotelier's main property management solution, whether OTA or direct. It removes the need to chase payments, handle invalid cards, and deal with fraudulent reservations.

2. Guest journey support

Clock's hotel solution supports payment automation throughout the journey, enabling commission-free direct upsells during the guest's stay. Whether it's a room upgrade, additional services, or final payments, the system covers all seamlessly.

3. PMS integration

When the payment system deeply integrates with the PMS, the hotelier's core business solution, all booking folios get automatically updated, eliminating time-consuming and error-prone reconciliation.

4. Saved costs

Especially for European hoteliers, capturing individual bookers' cards reduces interchange fees – an effective increase in net revenue by approximately +2%.

Note to hoteliers

It's important for hoteliers who have transitioned to Clock's payment solution to understand the outcomes of simultaneous usage with OTA payment solutions. Since Clock's service encompasses the benefits of payment automation offered by OTAs, continuing with OTA payment methods means you'd still incur the higher Interchange++ and overall processing costs from the virtual cards issued by the OTAs.

Booking.com offers a feature called Booking Sponsored Benefit, which subsidises part of the end price, making bookings attractive. However, this benefit is only available to hotels using or allowing Payments by Booking. It's crucial to consider the increased costs for processing due to the much higher Interchange fees and the possible effect on bookings from such revenue subsidies.

Whether you keep using OTA payment solutions or switch entirely to Clock's in-platform payment, we have you covered. Clock's in-platform payment solution can serve as a replacement for or an improvement to OTA payment solutions, ensuring you benefit from streamlined processes and potential cost reductions.


While popular OTA payment solutions offer convenience and various payment options, they have downsides, like high processing costs, complex reconciliation tasks, partial automation, and limitations in enhancing the guest journey.

Clock's In-Platform Payment Solution addresses these issues by providing holistic automation, supporting payments throughout the guest journey, integrating seamlessly within the property management system, and being more cost-efficient.

By transitioning to Clock's solution, hoteliers can enjoy increased net revenue, streamlined operations, and enhanced guest experiences. We recommend carefully considering the benefits of Clock's in-platform payment system, whether as a complete replacement or an enhancement to existing OTA payment solutions, to maximise these advantages.

Pelle Sundin

Senior Content Writer

Pelle's mission is to make hotel technology insights practical and easy to understand. In his free time, he travels the world to hunt for waves, drinks coffee and makes music.

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