But, how do you do it?

Well, there are basically two ways that a B&B or self-catering complex can operate with a credit card.

1. Accept cards solely for deposits; and
2. Accept cards for all payments.

Naturally, it’s possible to start off just taking card payments for deposits and move onto accepting them for all payments. In fact, it’s useful to do exactly this to try out card payments for your business.

If you’re only taking card payments for deposits then you don’t need to sign up with a bank. The simplest way is to sign up with paypal for a business account. Payments received will cost you 3.4% plus 20p so if you take £10 will cost you about 54p (5.4%), £100 will cost £3.60 (3.6%) and £1000 will cost £34.20 (3.42%). These charges are similar to those that a small business would pay were they to do credit card processing via their bank in the UK but somewhat higher than the typical 0.75% for banks in France.

From these figures you’ll see that it’s best to use paypal for deposits. That way a typical 25% deposit will effectively cost you under 1% of the total bill for paypal processing.

You could use paypal to accept all payments this way but you would need your bookings to be paid 100% in advance to do that as you can’t easily use the paypal system to make on the spot payments (if you really have to you can do it by having the guest logging in using your Internet access and making the payment). So, if you want to accept all payments by card, then you need to get the little credit card machine although, in principle, you can run with PayPals virtual terminal option (£20/month) which gives you the equivalent of the little machine but using your computer to process the cards.

To get a credit card machine setup you need to have a business bank account and, in most cases, have had it for six months although for B&B and self-catering properties the bank will normally waive the six months requirement. In France, you’ll need to be registered and provide your KBIS.

Costs for this vary a lot. You can buy your own machine but they’re rather expensive (typically £300/£500) and therefore most people rent them from the bank (around £20/£30 per month). In most cases you’re better to opt for a fixed installation as the portable terminals can cost 50% more. Other things to consider are which cards you’ll accept. Normally Visa/Mastercard are sufficient (and will include Visa Electron and Maestro). American Express is becoming more popular but is usually more expensive than other cards. If you get a lot of Japanese then it’s probably worthwhile taking JCB. You can even accept various storecards but unless you’re in a shopping centre it’s probably not going to be worth the extra expense.

How do you do it? Open a business bank account then apply for the credit card facility at your bank.

One thing to watch is that you will need Customer Not Present enabled. This lets you charge cards without having the credit card in your hand. You’ll need this to take deposits.

Is it worthwhile doing though? Yes, it is. Sure it will cost you more but you can take that into account in your pricing. If you assume that a credit card payment will cost you 4% then adding as little as 2% to your prices will pay for it all in that not everyone will pay by card and many of those that do will use a debit card which’ll cost you less. So, if you’re charging £50/night that equates to adding £1 to your charges. Incidently, don’t try adding that £1 only to credit card customers as you’ll just end up driving them away.

Related posts:

1. Merchant accounts to accept credit cards
2. Taking your holiday money: using credit and charge cards
3. Reducing the costs of using your credit/debit cards abroad

They’re writing on behalf of a Spanish couple who booked with us last July but who didn’t turn up.

Ordinarly, that would mean we’d have billed them as a no-show but at the time the booking system had a technical problem so we weren’t receiving their reservation e-mails and therefore didn’t know that they were coming. Anyway, net effect was that we didn’t charge them although under the terms of the reservation system we were entitled to.

They’ve gone to this European office with their booking confirmation that has a note of the two nights booked and EUR 98 charge. Except, that it isn’t a change: it’s just a note of what they would have to pay.

The Spanish guy in the European office doesn’t understand that at all. They quoted their credit card number and they’ve a statement with EUR 98 on it, they didn’t get their accommodation (because they went to the wrong place) but he believes that they’ve paid it as do they.

Usually the Spanish are much more Internet-savvy than the French but in this area they’re just as far behind in that they assume that they’ve paid when they quote a credit card number yet it’s only used for a guarantee.

I suspect that it’ll run for a bit as he sent another e-mail this morning threatening to translate everything and sent it to the French consumer protection authorities to demand the refund of this EUR 98 which they’ve not paid.

Related posts:

1. Complicated ATMs
2. Free money transfers

Although it doesn’t really matter which you have in the UK, it can matter a lot when you go on holiday and generally it’s best to be carrying both Visa and Mastercard abroad. In that respect the switch of my Halifax Visa card to a Mastercard suits me as that gives me a Mastercard credit card from them and a Visa debit card but others could easily find themselves with a Maestro card and a Mastercard which isn’t a good combination as Maestro isn’t nearly as useful as Visa debit and you’re left with two cards on the same system which isn’t good either.

Not a catastrophe for sure but do make sure that you have both varieties of card handy well in advance of your next holiday.

Related posts:

1. Taking your holiday money: what do you do when your cards are stolen?
2. Taking your holiday money: using debit cards
3. Taking your holiday money: using credit and charge cards

It’s safest to work on the assumption that your cards and/or cheques will be stolen and prepare for that. The way to do this is to keep a note of the card numbers, expiry dates and cancellation phone numbers for each card that you are taking with you. For the travellers cheques you need to note down the cheque numbers and the date & place that you bought them. Take one copy of the note of these details with you (separate from the cards, of course) and leave one behind with a friend or family member. It’s best to cut down on the number of cards too and go with the minimum which is three: one Visa, one Mastercard and one more for when the other two are stolen (keep the third one separate from the other two).

When they are stolen, you just go through the details and call to cancel the cards and cheques. The cancellation numbers are usually reverse charge numbers ie you won’t have to pay to call the banks. It’s useful to look up the number of the international operator and/or AT&T direct number for the countries in which you’ll be on vacation in advance.

In theory, cards can be replaced abroad within 24 hours but this depends on your card, your card company and the banking system in the country in which you’re on holiday. The best cards for replacement are gold/platinum ones but unfortunately they’re also the most attractive to thieves.

However, some countries just aren’t up to replacing cards quite so easily though a combination of language problems and primitive banking systems. Nobody who has stayed with us and had a card stolen in Prague has ever managed to get it replaced whilst they were there.

So what do you do if the card company can’t manage to replace the card? That’s when you need to look into how to get money to yourself from home and there are several ways of doing that which I’ll be covering next.

Related posts:

1. Taking your holiday money: using credit and charge cards
2. Taking your holiday money: using debit cards
3. Taking your holiday money: using cash cards

Now, you would sort-of expect that they would charge you if you’re depositing large amounts of cash in that there’s obviously work involved in handling it. You probably also know that they charge a percentage of your credit card sales too and that there’d be a charge for the credit card terminal too. But setting up the terminal? Providing the software for it? Surely not?

Well, if you plan on taking everything from your own bank, yes, you probably will be charged for setting up the terminal and you probably will be charged for the software required to run the thing too (anything up to $500). Not only that, but try accepting card payments online and you’re potentially talking another $500 for the software that you’ll need to accept those payments too.

That’s just for the standard Mastercard and Visa acceptances too. Add American Express or anything else and you add to your costs yet again. Even commonly used things such as the ability to process customer not present transactions is generally seen as another opportunity to charge you.

What the bank won’t be too upfront about telling you is that you can get a merchant account from a separate organization. There are increasing numbers of these outfits around and the market competition is driving prices down with the likes of First Data providing free setup, free point of sale software and 24/7 service (something that, quite surprisingly, isn’t always provided by the banks) and things that you might expect to be standard but usually are billable such as reprogramming of the terminal.

Related posts:

1. Accepting credit cards in a B&B
2. Taking your holiday money: using credit and charge cards
3. Reducing the costs of using your credit/debit cards abroad

Just before we left I thought that it would be a good time to finally get around to applying for one as I figured that if need be I could just transfer the account over here (although in practice it looks like hardly anyone takes it here). I fired off the application for their blue card (I’m too stingy to pay the money for their charge cards) and it came back “no”. Never thought any more about it until I got the maildrop from William when I found buried in that a “60 second” application for their gold card which was addressed to me at my parents address (which I’ve not been living in for years now). Well, less than 60 seconds later, I’d filled it in for the laugh and off it went. Just got the latest maildrop of credit cards that I’ve not gotten around to changing the address of and what should I find but my brand new gold American Express card!

So you apply filling in your proper address and they don’t give you it. You fill in an address from years ago and they send you an even better card. Weird. Still not very useful in France but it does look very pretty as the whole card is a gold hologram. Oh, and I’ve even got a free sportsbag for applying too!

Related posts:

1. Which travel money card is the best?
2. Taking your holiday money: what do you do when your cards are stolen?
3. Taking your holiday money: using credit and charge cards