Hotel online payment fees and what you actually pay

In short

• Standard UK cards processed via Stripe cost 1.5% plus 20p per transaction.

• International and corporate cards incur higher fees that can reach up to 3.25%.

• Hotels using hotelspot report a 35% drop in no-shows when requiring upfront online payments.

• Currency conversion and chargeback disputes add extra fixed costs to the baseline commission.

• Virtual credit cards generated by online travel agencies carry commercial rates that significantly impact profit margins.

How much is the card payment commission?

A standard domestic card payment commission in the UK is 1.5% plus a 20p fixed fee when using processors like Stripe. Rates increase for European Economic Area cards and peak for international or corporate cards. The final amount deducted from your payout depends entirely on the specific type of card the guest holds.

When a guest books a room directly on your website, the payment gateway processes the transaction and takes a cut before sending the funds to your bank account. According to the Stripe UK pricing from 2024 , standard domestic cards are the cheapest to process. If a guest uses a card issued outside the UK or Europe, the processing fee jumps to 3.25% plus 20p.

Properties in the Republic of Ireland face a slightly different fee structure. The Stripe IE pricing from 2024 sets the rate for standard European Economic Area cards at 1.5% plus €0.25. International cards processed in Ireland cost 3.25% plus €0.25.

Below is a comparison of standard Stripe processing fees for hotels in the UK and Ireland.

Implementing a reliable payment gateway requires proper technical configuration. You can read more about the exact steps in our guide on Stripe Connect setup .

Are digital wallets cheaper than physical cards?

Digital wallets like Apple Pay and Google Pay do not offer lower processing fees than physical cards. The gateway charges the exact same commission based on the underlying card linked to the guest's digital wallet. If a guest uses a premium corporate card via Apple Pay, you will pay the higher corporate card rate.

Some alternative payment methods can reduce processing costs. Open Banking allows guests to pay directly from their bank account using an app. This method bypasses the traditional card networks entirely. Open Banking transactions usually carry a small fixed fee rather than a percentage of the total booking value.

Guests increasingly expect to pay with their phones without pulling out a physical wallet. A front desk manager at a 50-room boutique hotel dealing with a morning checkout queue can save hours each week by allowing guests to settle bills via mobile devices. Providing guest app QR codes in the room allows visitors to pay for extras before they even reach the lobby.

What hidden costs exist in online payment processing?

The most common hidden costs in online payment processing include currency conversion markups, dispute fees, and non-refundable base commissions on cancelled bookings. These expenses rarely appear in the headline marketing materials of payment processors.

If a guest decides to pay in a currency different from your payout currency, the processor applies a conversion fee. Stripe adds a 2% fee when currency conversion is required. This means a US tourist paying in dollars for a London hotel room will trigger an additional charge on top of the international card fee.

Another significant hidden cost is the chargeback fee. When a guest disputes a transaction with their bank, the payment processor deducts the disputed amount and applies a penalty. Stripe charges a fixed £15 fee for every chargeback dispute in the UK based on their 2024 terms. You lose this fee even if you submit evidence and win the dispute.

Finally, most modern payment gateways do not return the processing commission when you refund a guest. If a guest cancels a fully refundable £1000 booking, you return the full £1000 to the guest but you still lose the £15 processing fee.

How do OTA virtual credit cards impact your margins?

Virtual credit cards generated by online travel agencies carry commercial rates that significantly impact profit margins. When a guest pays Booking.com or Expedia, the agency issues a temporary virtual card to the hotel to cover the reservation cost minus their commission.

Payment networks classify these virtual cards as commercial or corporate cards. This classification forces the payment gateway to apply the highest possible processing tier. Instead of paying the standard 1.5% domestic rate, your hotel will likely pay around 2.5% to 3% to process the virtual card.

This creates a double charge scenario for the hotel. You first pay the 15% to 20% commission to the online travel agency for securing the booking. You then pay an elevated payment processing fee just to access the remaining funds on the virtual card. Encouraging direct bookings is the only effective strategy to bypass these commercial card fees.

When do online payments pay off for a hotel?

Online payments pay off when the revenue saved from preventing no-shows and automating upselling exceeds the monthly processing commissions. Securing funds at the time of booking guarantees revenue even if the guest fails to arrive.

According to a SaleCycle 2023 report , the travel industry sees an 82.4% cart abandonment rate. Offering trusted local payment methods and a fast checkout process helps convert hesitant visitors into confirmed guests. Hotels using hotelspot record a 35% drop in no-shows when guests pay upfront.

Online payments also unlock new revenue streams within the property. When a guest orders a burger at 10 PM and pays immediately on their phone, the food and beverage team avoids unpaid bills and front desk bottlenecks. Automating these transactions directly increases room service revenue without requiring additional staff on the night shift.

The initial cost of a 1.5% commission is entirely offset by the reduction in administrative work. Your reception staff no longer needs to manually type card numbers into a terminal or chase guests for unpaid minibar items.

Frequently asked questions

Can a hotel pass the payment fee to the guest?

In the UK and the European Union regulations prohibit surcharging for consumer credit and debit cards. You cannot add a 2% checkout fee just because a guest chooses to pay with a standard Visa or Mastercard.

Do online travel agency virtual cards cost more to process?

Yes. Virtual cards issued by agencies like Booking.com are treated as commercial cards by payment networks. They usually carry a higher processing fee that can range from 2% to 3%.

Is Stripe the only payment option for hotels?

No. There are many payment gateways available on the market. Stripe is widely used because it integrates easily with modern property management systems and guest applications.

Are refund fees returned to the hotel upon cancellation?

Usually no. Most modern payment processors keep the original processing commission even if you issue a full refund to the guest.

What is a payment gateway?

A payment gateway is a technology that securely transmits guest transaction data to the acquiring bank. It acts as a digital bridge between your hotel website and the financial networks.

How long do online payouts take?

Standard Stripe payouts for businesses in the UK take three business days. Some processors offer next-day payouts for an additional premium fee.

What is SCA?

Strong Customer Authentication is a European regulatory requirement designed to reduce fraud. It requires guests to verify their identity using two factors, such as a password and a fingerprint, during online checkout.

Take a close look at your monthly payment processing statements to identify exactly how many transactions fall into the expensive international or commercial tiers. If you want to automate your payment collection and reduce front desk workload, schedule a hotelspot presentation to see how our integrated payment solutions work in practice.