Anyone have any dealings with the new payment info that other STR platforms are demanding?
What new payment information @Kerri?
It may be this:
Secure and PSD2 Compliant Payment Collection
You might have heard of Strong Customer Authentication (SCA) , a new rule coming into effect on September 14, 2019 in Europe as part of PSD2 regulation.
The new regulations will make it difficult for EU businesses to process card payments unless they have undergone 2-factor authentication by the card holder.
This means simply having the card details alone will no longer be an effective booking guarantee.
Which authentication methods will be available in practice will depend on the technical possibilities of the customer’s bank that issued the card.
What is “Strong Customer Authentication (SCA)”
Card payments will require a different user experience, namely 3D Secure, in order to meet SCA requirements. Authentication with two or more of these elements is required:
Something they KNOW e.g. password or security question
Something they OWN e.g. phone or hardware token
Something they ARE e.g., fingerprint or face ID
What changes with “Strong Customer Authentication (SCA)”
Transactions that don’t follow the new authentication guidelines may be declined by your customers’ banks.
Advantages and disadvantages of “Strong Customer Authentication (SCA)”
Although the additional 2-factor authentication required by SCA may cause some payers to fail to complete their payments, once the 2-factor is completed, the chances of fraud and charge backs will be lowered.
Where and when is “Strong Customer Authentication (SCA)” required
- India introduced mandatory two-factor authentication for online payments in 2014.
- Europe enforces Strong Customer Authentication as part of PSD2 from September 14, 2019. The rule applies for bookings from European guests for accommodations in the EU.
- Australia will enforce stricter authentication requirements to online payments from 2020.
- Brazil, Mexico and Singapore are planning stricter authentication requirements.
How about other regions or bookings for accommodation in the EU from guest outside the EU?
Nothing changes for businesses in other regions with bookings for accommodations in the EU from guests outside the EU.
How does XXXX help accommodation businesses to comply to these rules?
Our connection with Stripe can be used with or without Strong Customer Authentication. If you enable Strong Customer Authentication for Stripe it activates 3DS2 authentication for direct bookings from your booking page and for payment requests which you send to guests.
Paypal and Realex will are taking care of the required functionality from their end.
Many OTAs including Booking.com and Expedia facilitate guest payments on behalf of properties (channel collect) so properties will not have to deal with SCA.
Payment requests sent via XXXX are 3DSecure. If you require 3DS authentication you can send payment request to guests after they book via XXXX instead of collecting a card at booking time via the OTA.
While some European countries recently announced a delay, the majority of countries will go ahead as planned. Some banks might implement SCA despite the delay so is safest to consider 14 September 2019 the launch date of SCA in Europe.
Or it may be this:
We’re writing to let you know about some upcoming changes to our requirements for your payment and pricing settings, and what they’ll mean for you. We’re asking all our partners to check and update certain Extranet settings before September 1, 2019 .
This is to comply with the European Union’s consumer laws, which are designed to ensure clarity around prices and hidden charges. Because Europe-based guests can book properties all over the world—and because we believe clarity is important for guests—we’re asking you to check these settings, whether you’re located in Europe or not.
If you don’t update these settings, you may experience issues with guests – and even fail to comply with EU consumer laws. If that happens, we’ll have to make automatic changes to your listing and possibly even temporarily hide your listing from bookers in the European Economic Area.
What do I need to do?
1. Check and update your credit card pre-authorization settings.
You’ll need to state whether you pre-authorize guest credit cards or not. If you do—even if only occasionally—you’ll need to display:
- The amount you pre-authorize
- When you pre-authorize
- Which booking policies you pre-authorize for.
To update your pre-authorization settings, follow these steps:
- Log in to the Extranet and go to the Property tab.
- Click Policies and scroll down to Pre-authorization preferences .
- From there, click Update preferences and indicate your preferences.
- Click Save .
2. Check and update your extra charges: Local taxes and other additional fees
You’ll also need to specify all mandatory fees, charges, and other price components, including the price your guests have to pay if they’re traveling with children. Price components like taxes or extra charges for towels can’t be set as “Incalculable” anymore. All optional, non-mandatory charges should be added to the fine print section of your property description.
Which extra charges are included in this?
- All mandatory fees. This includes any fee guests are expected or required to pay by default, either to you, or through you to other authorities as a result of booking or staying at your property.
- Optional or conditional fees are not included in this. These are defined as any fees a guest incurs only after explicitly asking for a service (e.g. fees for spa facilities, extra cleaning service) that a guest explicitly requests and agrees to pay for.
- As a result of the regulations, all mandatory/unavoidable fees will be included in the overall price that guests see on your listing. Any fees marked “Incalculable” will now be considered unclear mandatory charges, and your listing will not be in compliance with the regulations.
For taxes, no action is required from you at this point. We’ll make any necessary changes on your behalf. However, make sure any adjustments we make to the info about your local taxes and charges are correct as soon as possible after September 1. If there are charges other than taxes set as incalculable, follow the process in the
To check the adjustments we make, follow these steps:
- Log in to the Extranet and go to the Property tab .
- Click VAT/tax/charges.
- If any of the charges were configured incorrectly, get in touch with your local Booking.com team so they can help you update these fees.
3. New requirements for limited-time discounts
There are new requirements for setting prices after a limited-time discount.
Under the new requirements, prices have to be readjusted as soon as a discount period ends. Then a different price must be offered for at least twice as long as the deal or discount was available for. For example, if you set up a Deal of the Day for 24 hours, you can’t offer that deal price again for at least 48 hours after the initial deal ends. You can adjust the price as many times as you want during this time frame, as long as the new price differs from the original deal price.
Also, Deal of the Day is changing its name to Limited-Time Deal. You’ll see this reflected on both the Extranet and main website soon. The product itself will stay the same.
Along with Limited-Time Deals, these changes will also affect some campaign deals, but don’t worry. Any time you set up a campaign deal that’s affected by these regulations, we’ll let you know.
For more info on the new laws and updating your settings, take a look at our
Your Booking.com Team
HomeAway/VRBO is demanding that you are set up as an independent contractor in order to get paid.
Not in the UK/EU they aren’t.
I just filled out the HomeAway/VBRO forms – what they are doing is switching from a pay service to their own payment back end, with payment delayed until booking date, similar to Airbnb. I wouldn’t say they are “demanding” that you be set up as a contractor – they are having you fill out a U.S. W-9 tax form so they can, if required, issue you a 1099-K. This is in order to report your income from credit card payments they receive from guests and remit to you to the IRS. The cutoff to get issued a 1099-K is $20,000 and 200 transactions or more.
So, if I do not receive over $20,000 per year from HAW/VRBO payments than I will be not issued a 1099-K? I never have over 200 transactions in a year.
Can’t speak to what they will do. They are not required to issue under the threshhold.
Thanks for the info.
Doesn’t really require anything specific. Much easier than being set up as an employee actually. It’s interesting to me though because there are a lot of rules set-up about who can be considered an independent contractor. I work in healthcare and it used to be totally normal to work as an indep contr. but then a lot of companies got in trouble because they were still dictating a certain amount of stuff that would ultimately make us “employees” (wear a labcoat and scrubs, come in at 7:00, use this machine, that kind of thing). It’s seen as a way for employers to get out of paying employment taxes but I personally liked it better because the rates were much higher, even with paying self-employment taxes, and I still had more independence than an employee. I don’t use VRBO/Homeaway but assume they dictate what you can and can’t do so will wait to see the fallout from that.
Alternately, if you aren’t providing breakfast, concierge services, daily cleaning for your guests, and some other stuff that most hosts don’t do, then you don’t have to pay self-employment taxes anyways so not sure why it matters. The idea of indep contractor or not seems odd here in the hosting world.
This is an interesting development. @Kerri What are they asking you to do differently?
Yes, but you still have to report the income, they just don’t have to issue the 1099. It’s easier to get one, honestly. What are you concerns? I’m not sure I understand.
We’re definitely not employees of Airbnb. At least, I’m not.
I don’t like to give out my SS number with all the other info a W-9 requests.
Years ago a rogue bank employee used my SS along with other info and opened a credit account in my name. He was fired and charges were pressed (he got probation) but it caused a lot of stress and time ect. for me.
No, definitely not. But if you provide certain services, the IRS will hold you responsible for self-employment taxes. It’s a murky area for this. I could see lots of interesting stuff coming out of it if we dove into it.
Are you in the US? You can’t really have a legit business without using your social security number.
We have a CPA who handles our taxes and claim income from our STR as well as a LTR we have. He has never said anything about self employment taxes, so hopefully it will not be an issue.
Sounds like the way to go!
Actually there are 2 states that requires a 1099 be issued if they paid you over I think it’s $600 during the year. I know Massachusetts is one. I want to say the other is Vermont, but not positive.
Excellent. Your CPA will be able to give you better information that’s specific to your situation and your area. As an international forum, we’re unlikely to be able to give accurate advice.