Online Payments: what and why?July 2019

Disclaimer: all numbers and percentages shown in this presentation can vary by market.Please bear in mind that these numbers are based on the current business situation, and can change over time, from market to market.

What is Online Payments by Booking.com?Payment methods that provide an alternative to credit cards. The most common methods include debit cards, bank transfers, eWallets, and phone and mobile payment solutions. For many bookers, one or more of these alternatives have become their preferred payment method.

Choice and flexibility around what to pay, when to pay and how to pay. Booking.com wants to offer bookers more choice with options like pay now or pay later, as well as different deposit options as part of our partners’ policies and rate set-ups.

Why do we offer this?We’re trying to offer guests more choice, more flexibility and more clarity when it comes to completing reservations on Booking.com.

What are we doing for Connectivity Partners?We’re constantly adding features to our APIs that help you offer a smoother payment experience to your properties.

Alternative payments methods are on the riseUse of alternative online payment methods rose from 43% in 2012 to 59% in 2017, and continues to grow. We’re currently

looking at which of those payment methods are most useful to our bookers, and most beneficial to our partners.

Adyen, 2017

booker books with credit card

Properties that accept credit cards

Booker books with alternative payment methods Virtual credit card

Facilitated by Booking.com

Booking.com

BookerProperties that

accept credit cards

The booker journey using a Credit Card

Or performs any other payment-related activity such as paying off a deposit for another

reservation

The booker journey using Online Payments

How does Receiving Online Payments work?

Booker

For our bookersit’s about choice and flexibility

When paying online, more and more people are using eWallets such as:

● PayPal (mainly Europe) ● AliPay (China)● QIWI (Russia) ● Sofort (Germany)● iDeal (Netherlands)● Apple Pay (Mobile)

These e-Wallets are connected directly to bank accounts, not credit cards. Often this feels more secure for bookers as their eWallet is connected to the bank they use and trust.

We’re adapting to bookers’ needs

By offering alternative payment methods like e-Wallets, we’re unlocking new options for our bookers.

And for bookers without a credit card, it's not just a case of more options, but whole new possibilities.

Now these bookers can reserve a stay where they couldn't before – at properties who need a credit card as a guarantee.

Unlock new possibilities for our bookers

A recent survey revealed that one out of five Booking.com bookers abandons the reservation process because their preferred payment method isn’t available.

By introducing payment methods they trust and prefer, we believe we can convert more potential bookers into paying guests.

And by providing more options around how and when to pay, we hope to create a better customer experience overall.

Improve our booker experience

For our propertiesit’s about opportunity

Why Online Payments are great for properties

Lower cancellationsIn early stages, some properties that leveraged Online Payments saw fewer cancellations for their bookings.

Guaranteed reservationsNo risk of chargebacks or fraudulent bookings.

Additional bookersWith Online Payments it’s expected to see bookings increase.

Time savedPartners spend less time processing invalid CCs, collecting new information from guests, etc.

For connectivity partnersit’s about helping you to help your

properties

How Online Payments can help your properties

Reduce operational hassle by displaying important

information about Online Payments on your interface.

Help create a better guest experience by ensuring

properties have all necessary information available at all times.

We’ve developed new features to help connected properties

VCC authorisationConnected properties experience a higher failure rate (11.7%) when authorising virtual credit cards compared to non connected properties (6.9%)

A higher failure rate leads to a negative experience.

6.9% 11.7%

Non-connected properties

Connected properties

Authorising virtual credit card failure rates

What is causing these failures?According to our data, the top three reasons for VCC failures account for around 95% of all cases.

Activation date

A property tries to charge a VCC before its activation date.

Expiry date

A property tries to charge a VCC after it has expired.

Insufficient balance

A property wants to charge a VCC with an amount higher

than what is left on the card.

Activation date

The VCC activation date tag shows properties the

date they can start charging the VCC.

Expiry date

The expiration date tag shows properties the last

day they can charge the VCC before it expires.

Current balance

The current balance tag shows properties the

available balance on the VCC.

We’ve developed new features in the Reservations API to give properties constant access to VCC information

Available in September 2019

In sum, you can help your properties – and their guests – enjoy a better payment experience

To help properties reduce virtual credit card authorisation failures, we’ve added new features to the Reservations API:

● Activation Date, that shows properties when they can start charging a VCC. ● Current Balance, that shows properties how much they can charge a VCC.● Expiration Date, that shows properties the date by which they should charge a VCC.

Together we can create a better experience for both properties and guests!

Any questions? Check out the help articles on the Connectivity Partner Help Centre.

Want to see what the tags look like? Check the documentation on the Partner Portal.

Appendices

A quick reference for Online Payments

What is it?Online Payments give bookers more choice and flexibility through initiatives like ‘pay now or pay later’, as well as alternative payment methods (e-wallets, debit cards, bank transfer etc.)

Which bookers can use it right now?

Ideal: NetherlandsMister Cash: BelgiumSoFort: Austria and GermanyAlipay: ChinaUnion Pay: ChinaPayPal: Belgium, Netherlands, Austria, Portugal, Spain, France, United Kingdom, USA, Italy, Canada, Poland and Germany. ApplePay: UK, United Arab Emirates, Italy, Sweden, Denmark, Ireland, Finland, Germany, Netherlands, Austria and Belgium.

Which bookers can potentially use it in the future? The aim is to give bookers worldwide access to this way of paying. We’d like to unlock Alipay for Chinese bookers, QIWI for Russian bookers and the option of paying in installments for Brazilian bookers.

What do partners need to do? Charge the virtual credit card the amount that appears on the booking confirmation.

Which properties can use virtual credit cards?Currently this is only available for partners that accept Mastercards, as well as partners that can charge credit cards without the cardholder present (what we refer to as a ‘virtual Mastercard’).

When can partners charge the card? The charging date is stated in the booking confirmation (XML message or confirmation sent to property) and must follow the policies applicable to that booking..

What fees do partners need to pay? They’ll have to pay a fee to their bank, as agreed between the property and the bank, when charging a virtual Mastercard.

What is a virtual Mastercard? A virtual Mastercard is a Mastercard with a unique card number, but which does not exist as a physical card. Some also refer to it as ‘cardholder not present’.

What do the online payment reservations look like in the reservations overview in the extranet?

What does it look like?What do the online payment reservations look like

in the reservation details of a booking in the extranet?

What does it look like?What do the OTA XML indicators,

from Booking.com to our Connectivity Partners, look like?

What does it look like?What do the OTA XML indicators from a

Connectivity Partner setup to a CMS or PMS, look like?

What do the Online Payment banners look like on the Booking.com search results page?

What do the Online Payment filters look like on the Booking.com search results page?

What do the alternative payment methods look like on the Booking.com property page?

What does the booking process on Booking.com look like on desktop?

Payment methods are tailored to the booker’s country

Other payment methods are now also available for iOS mobile users.

What does the booking process on Booking.com look like on mobile?

More flexibility for bookers. Pay at the property or pay now.