One of the most challenging aspects of vacation rental management is to ensure a great guest experience. It all starts with seamless bookings and payments.
For the property manager, the process needs to be just as smooth and easy, and, in a perfect world, with minimal risk to chargebacks and fraud. That may sound too good to be true, especially since the risk of fraud and chargebacks in the vacation rental industry is regarded as one of the highest in all rental housing. A big reason is the fast pace of booking in an online environment that is mostly faceless.
"The short-term rental industry is known as a high risk profile by payment processors because of that," said Uno Veski, RealPage Manager, Product Management. "People are booking at the last minute for the weekend. That's where all the risk is."
The risk heightens in urban markets like London, New York, Chicago and Dallas where the concentration of consumers is greatest. Screening and risk management on demand is essential, Veski says, and not out of the question for vacation rental operators.
A seamless vacation rental payment process through integration
Veski, a former software engineer and financial industry veteran, recently led a webcast that discussed how vacation rental property managers can minimize risk through technology that provides a seamless payment process.
The webcast offers an inside look at KigoPay, a proprietary and integrated payment solution in the Kigo Marketplace product suite. The discussion focused on how real-time guest screening technology can ensure each booking is secure and how to map and improve payment flows, localize the payment experience, manage payment data and minimize fraud and reduce monetary security risk. It also offered tips for processing multiple currencies when bookings originate from different countries.
"The goal is to make payments so seamless that the property management company doesn't have to worry about payments all together," Veski said. "Kigo payments are pre-configured so that you can get up and running in days and focus on growing your property management business."
KigoPay is essentially a merchant services provider that fully integrates with the rest of the vacation rental property management system. Unlike with using a third-party credit card payments platform, transactions are posted into the property management accounting system without the need for manual posting.
Payment process for the vacation and short-term rental industry
An even bigger advantage, Veski says, is that KigoPay has been designed to meet specific industry needs that minimizes risk and creates an overall greater property manager experience. Users don't have to take the extra step of being underwritten, be accountable for yearly PCI compliance and manage their own credit risk through reserve requirements like with typical merchant services providers.
In Europe, for example, some underwriters require that a percentage of the transaction be held in reserve. Not with KigoPay, Veski says.
"Payments are all about risk," he said. "KigoPay is optimized specifically for this industry. If you have a bad renter on a different site, KigoPay has the risk engine to catch fraud better than a non-industry specific provider.
Simple, easy onboarding to get started
Because KigoPay is part of the Kigo Marketplace platform, payments are automatically configured to the website. Kigo Marketplace acts as the merchant on record and once property management companies are onboarded to the Kigo platform they are ready to accept payments.
"That changes everything," Veski said. "We make it easier to onboard. It's a really simple application. You can start processing payments immediately."
Payments are integrated into the marketplace platform from end to end, fully secure from check out through the reservation system and on to settlement reporting. Because KigoPay is integrated, users don't have to log out into separate payments gateway.
"You don't have to take payment in separate system and type into Kigo that your reservation has been paid," Veski said. "It's all integrated. The payments flow, the bookings flow."
Moving at the pace of the industry
The system moves at the pace of the vacation rental industry.
“If you have a last-minute check-in, the guest uploads all his or her information and is screened,” Veski said.
Veski shares more details about the solution and its check-in model that prevents chargebacks in the webcast.