Delayed Payments Is the Next Challenge
There is not a small business or global industry that has not been affected by the Coronavirus Pandemic. The travel industry has been hit the hardest, and its recovery will be long and complicated. The past few months, while much of the country was in lockdown or in quarantine, many of your clients were doing the same thing in trying to save their businesses – filling out paperwork for the Paycheck Protection Program, working new policies for employees working from home, and joining countless webinars day after day to determine what their priorities should be in this new reality. Though, with cities reopening, coupled with the past holiday weekend, the numbers showed a bright light of optimism with record breaking numbers for some, as well as data showing an increase in bookings. Yet, there seems to be a new challenge for your customers as reports of payment processors holding funds has recently emerged.
Last week, an article in VRM Intel discussed how customers of a well-known payment processing facilitator announced that they would be holding funds for 30 days from the time of booking. The article states that “…while some PMs have not yet been notified, the new 30-day policy will apply to all vacation rental management accounts.” The article then goes into detail listing how this 30-day delay in receiving payments would affect PMs. We have since heard that some exceptions have been made for certain Property Managers, and we are also hearing of delays with other processors, as well. Here is a link to the article if you have not seen it yet:
Also, an article in the Wall Street Journal posted on June 15th is titled “Hit by Coronavirus – and a 30% Holdback by the Payment Processor.” The article states that “Processors like PayPal Holdings Inc., Stripe Inc., Square Inc. and Worldpay are making some businesses wait additional days or weeks to access funds deposited in their accounts, citing the need to protect themselves against possible losses when people who have bought airline tickets, vacation packages and some other goods and services seek refunds.” It then goes into detail of one Stripe merchant whose account was deactivated with no warning, as well as holding their funds for 120 days to cover any refunds as Stripe deemed this company as high risk, though no actual transactions were listed as high risk on their online dashboard. Read the full article here.
Companies partnered with Stripe or other processors whose new policy is to hold funds for 30 days from the time of booking are guaranteed to see a disruption in revenue if they’re not aligned with another payment provider that can serve as a better option.
Do You Have the Right Payments Partner? Time to Re-evaluate?
A key point in strategic partnerships is partnering with others whose core strengths complement and expand your own offerings. Software vendors, for example, would be better served by partnering with other companies that can offer a strategic value, rather than simply refer a new business over. ASCENT Processing provides the most current strategic value in that it still is onboarding new clients with deposits made within the normal 48 to 72 hours. This deposit time is a far cry from this new 30-day hold policy seen by other processors in this space. The other value proposition is the fact that Ascent has been able to board new clients during this pandemic, while other payment processors have declined these same clients.
Companies have invested a considerable amount of time and money in its development to separate itself from its competitors. Money spent on developers, marketing, and its company infrastructure has been invested to its future success. The same dedication in growing the company should be equally dedicated to providing itself with the correct strategic partner. It’s not about just sending your clients to your current payment processor as a simple referral, it’s now about sending your clients to the right payment processor who has the expertise in setting them up correctly, making sure that their funds are deposited within a few days rather than a few weeks.
Who ASCENT Processing Is
ASCENT Processing has more than 20 years in the payment processing world, specializing in the vacation rental industry. It is more than just offering better rates. We provide payment regulation expertise, innovative FinTech solutions, the highest level of security concerning data breaches, and customized chargeback and support services for the top reservation software providers and the leading property managers in the alternative lodging space.
Scott Lim is the Business Development Manager for Ascent Processing, Inc. He has over 18 years in the payments industry, working in all facets of the FinTech ecosystem. To submit related topics or questions, please reach out to him at Scott@AscentProcessing.com