Marco D’Amore, CEO of ErmesHotels.
As the hospitality industry undergoes digital transformation, payment management has emerged as one of the most complex and strategic challenges facing hotels. Integrating embedded payment solutions directly into central reservation systems (CRSs) is now seen as the ideal answer to the sector’s demands for flexibility, regulatory compliance and operational efficiency.
The Pitfalls Of Traditional Bank Gateways
Hotels must simultaneously manage three critical variables:
• Cancellation policies
• No-show management
• Payment policies
These factors generate a wide range of rate plans, each tailored for different customer segments, such as nonrefundable prepaid rates for price-sensitive guests or flexible corporate rates for business travelers. Traditional banking gateways, however, often prove too rigid and lack the technical specialization and expertise required to address these operational nuances. They are simply not built for the layered needs of hospitality payment flows.
The Impact Of Regulation And Fintech
The implementation of European regulations like PSD2 and its evolution into PSD3/PSR has introduced new security and authentication standards, making deep expertise in both payments and hospitality essential. In the past, hotels relied on outdated methods like MOTO (mail order/telephone order), which involved collecting credit card data over the phone or by email. These processes not only delay operations but also expose both hotels and guests to fraud risks. Guests are increasingly aware of these vulnerabilities, and as expectations rise, so too does the urgency to modernize.
The rise of fintech and Banking-as-a-Service models now allows non-bank companies to integrate financial services via APIs, paving the way for embedded payment solutions not only in property management systems (PMSs) but, crucially, CRSs. These technologies are already common in industries like e-commerce and retail. It’s time hospitality caught up.
CRS Vs. PMS: The Centrality Of Data
While many modern PMS platforms are integrating payment gateways, the CRS stands out as the ideal platform for payment management. The CRS is customer-centric, overseeing the entire booking flow and holding original, primary customer data. This enables precise handling of payments, pre-authorizations and refunds in line with hotel policies.
In contrast, the PMS, which is focused on operational management, receives “second-hand” information from other systems and cannot proactively optimize payment flows if the input data is incomplete or inaccurate. For hotels seeking to unify the payment process and ensure consistency across policies, currencies and customer segments, the CRS offers the only practical foundation.
From the hotel’s perspective, the result is a cleaner, more consistent internal workflow with greater control. From the guest’s side, it means more payment options, higher security and less friction. Both parties benefit from a more transparent and seamless experience.
Overcoming Legacy Limitations
Despite technological advances, many hotels still process payments via MOTO—an outdated practice that exposes them to fraud risks and operational inefficiencies. Evolving consumer protection laws and increased responsibility for credit card issuers are making such practices increasingly untenable.
For example, starting May 2025 in France (as has long been the case in parts of Northern Europe), issuing banks are blocking transactions that attempt to bypass 3DS authentication (as outlined in France’s OSMP Plan by the Banque de France).
Fintech integration, on the other hand, enables hotels to offer guests a seamless, secure and multichannel payment experience. Support for both international and local payment methods (including credit cards, wallets, BNPL, pay-by-bank and alternative systems) can stimulate new demand by meeting the needs of specific market segments.
That means the pressure is growing for hotels to adopt secure, compliant workflows that meet these evolving standards. Resistance to change often stems from internal habits and legacy systems. But hotels that fail to upgrade risk falling behind not only in security, but in guest satisfaction as well.
Guest Expectations Have Changed
Modern guests don’t want to think about payment. They expect payments to be fast, flexible and invisible. The current generation of travelers expects a myriad of options such as contactless payments, mobile wallets like Apple Pay and Google Pay, buy-now-pay-later and region-specific systems like iDEAL (Netherlands), Pix (Brazil) or Swish (Sweden).
These expectations mean hotels need to be prepared to support both international and local payment methods. Hotels that offer a smooth, secure, multichannel payment experience are far more likely to earn repeat business and strong reviews.
Operational Efficiency And International Compliance
Automating reconciliation between payments and bookings through integrated systems can reduce operational times by up to 60%. An integrated system that streamlines reporting and standardizes all payments and reservations is set to become the industry norm.
Deep knowledge of both payments and the hospitality sector—and an understanding of how each transaction and booking should be managed—has transformed payments from a simple commodity into a true business driver. When it comes to payments, it’s no longer about choosing the cheapest provider; it’s about integrating a payment partner into the CRS that streamlines the customer journey while ensuring regulatory compliance on a global scale.
I believe this integrated, compliant approach not only reduces risk and operational headaches but also enhances the guest journey and drives revenue through higher conversion rates and better cash flow visibility.
It’s Time To Modernize Your Payment Model
Thanks to its central role in the customer journey and its ability to intelligently and compliantly orchestrate payment flows, the CRS is emerging as the true strategic hub for hotels aiming to evolve from basic “mail order” operators—processing card charges via MOTO—to cutting-edge digital players offering guests a frictionless and secure experience.
As the hospitality industry continues to modernize, embedded payments are not a trend—they are the new standard. The only question is:
Hotelier, are you ready to transform your hotel’s payment management and become the “Amazon of Hospitality”?
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