Pearson New International Edition International pcl tp indd 1

FIGURE 9
Payment card processing.
Step 1
Initiation
Authorization
Completion
of Transaction
Receipt
of Funds
Step 2
Step 3
Step 4
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GUEST CHARGES, PAYMENT, AND CHECK-OUT
the transaction to the appropriate card-issuing bank that, in turn, debits the
guest’s (cardholder’s account) and credits the account of the MSP (not the
account of the hotel).
•
Receipt of funds. The final processing step is the actual receipt of the money
due to the hotel. After all previous steps have been completed, the MSP cred-
its (makes a deposit to) the hotel’s account (usually within two to four business
days). During this time, the MSP may contact the hotel to clarify any ques-
tionable sale. It is important to note that initiation, authorization, and even
completion of a transaction do not guarantee a hotel’s payment. These steps
only mean that payment has been approved at the time of the transaction.
The monies owed to a hotel are issued by electronic funds transfer (EFT).
All charges and fees imposed on the hotel by the card issuer or the hotel’s MSP
are deducted before the hotel receives its payment. EFTs are safe, fast, and reli-
able, and leave an identifiable accounting trail that can be reviewed by the
FOM or controller. EFTs of all kinds are issued through the Automated
Clearing House (ACH) network, a highly reliable, nationwide, batch-oriented
EFT system governed by the operating rules of the National Automated
Clearing House Association (NACHA). The NACHA represents more than
12,000 financial institutions and 650 organizations. It develops operating rules
and business practices for electronic payments in the areas of Internet com-
merce, electronic bill and invoice presentment, e-checks, and international cur-
rency payments.
Direct Bills If a guest’s folio balance is not settled with cash or a payment card, the
account balance may be transferred from the guest ledger to the portion of the city
ledger that records direct bills. Recall that direct bills are used when an entity preap-
proved for credit agrees to pay the charges incurred by a guest. This transfer reduces
the guest’s portion of accounts receivable and adds the same amount to the direct bill
section of the city ledger.