On September 14, 2019, new requirements known as Strong Customer Authentication (SCA) were introduced to increase the security of electronic payments. These requirements apply to transactions where both the business and the cardholders bank are located in the European Economic Area (EEA).
The EEA is comprised of: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom, Iceland, Liechtenstein, and Norway.
This article describes how 3D Secure works in each part of the system if you are using Stripe, for Cloudbeds Payments in Europe, see this article: Cloudbeds Payments (Europe) - 3D Secure
How does it work?
When you attempt to charge your guest's credit card (processing a payment) with Stripe, the cardholder has to confirm the payment request by completing a multi-factor authentication on the card provider's 3D secure web page.
Depending on the institution (bank), different kind of authentication could be requested (fingerprint, passwords, SMS code, etc).
- When the guest approved the first request, consequent transactions for most cards won’t require 3D Secure authentication.
- Some cards will need to be authenticated for every transaction (this is decided by the card’s bank). In this case, Cloudbeds will send an email with Approve or Decline links for each transaction to the main guest.
See in the sections below different ways the card can be processed and how the 3D Secure presented to the guest.
When making a reservation on Cloudbeds Booking Engine using a card that requires 3D Secure, the guest will be redirected to their card provider's web page to perform the authentication.
In case your guest cannot complete the authentication process, they need to contact their bank to get more details on why it happened.
If the authentication is successful, the guest will be redirected to Cloudbeds Booking Engine page and the reservation will be created.
If it is denied/failed, the reservation will be created with the status Canceled.
The 3D Secure flow:
- When you attempt to charge the credit card (process a payment) for the first time, the system will send Payment Request email (see the example below) to the main guest.
- The cardholder must Approve or Decline the request by clicking the links in the email. In case your guest cannot complete the authentication process, they would need to contact their bank to get more details on why it happened.
- The payment will be pending to be processed in the guest's folio until the guest approve the request. To check the payment see the steps described here: Where can I see the payment with pending approval from guest?
- Pending payment will not be automatically allocated. You may only allocate the payment once it's approved and posted in the folio. Learn more: Will the pending payment be automatically allocated?
Notes about the Payment Request email:
- It cannot be edited like a custom template.
- It contains information about the reservation amount.
- It's not possible to send emails to other guests on reservations except the main guest.
- Both property and the guest receive a confirmation of the payment when it's approved or declined.
- The system will not send any email to the main guest for storing or authorizing the card.
When the guest clicks to Approve, they will be redirected to their bank's page to perform authentication (e.g. password, fingerprint, token, SMS Code, etc.).
If the authentication was approved by the bank, the guest will be redirected to a thank you page. The previously pending for approval payment will be processed and posted in guest's folio inside their reservation.
When the guest declined the payment, they will be redirected to the page like shown below.
If the guest accidentally declined the request, you can attempt another charge, the system will send another email to the guest with the new Approve or Decline links.
On Payment Options page, you can configure the Processing Methods for Stripe to process the deposit of reservations coming from Cloudbeds Booking Engine and certain OTAs (available for channels listed on this page only).
Selecting Process the payment for amount of deposit, will trigger the system to send Payment Request email to the main guest. The guest must Approve or Decline the payment. In case your guest cannot complete the authentication process, they would need to contact their bank to get more details on why it happened.
- Perform this action immediately - Stripe will attempt to process the deposit amount immediately when the booking is created and the guest will receive the Payment Request Email.
- Postpone until closer to arrival date - Stripe will attempt to process the deposit amount "x" number of days prior to the arrival date as specified in the setup at the same time your guest will receive the Payment Request Email.
Notes about the Payment Request email:
- It cannot be edited like a custom template.
- It contains information about the reservation amount.
- It's not possible to send emails to other guests on reservations except the main guest.
- Both property and the guest receive a confirmation of the payment when it's approved or declined.
- The system will not send any 3D secure email for card authorizations.
Charging a card that needs to be authenticated by 3D secure will trigger a modal where you should enter the guest's email address.
The payment will be added to the house account in grey (pending) and will only be posted after the guest's approval.
- You can check the Email Delivery Log tab, to see if the email was sent to the correct address or to resend the emails.
- The Payment Request email triggered in House Account does not contain any item or reservation information. Check an example below:
Charging a card that needs to be authenticated by 3D secure will trigger a modal where you should enter the guest's email address.
- You can check the Email Delivery Log tab, to see if the email was sent to the correct address or to resend the emails.
- Payment Request email triggered in Groups feature does not contain any item or reservation information. Check an email below:
The payment will be added to the Group as pending and will only be posted after the guest's approval.
Frequently Asked Questions
You can find the payment under the guest's folio inside their reservation. The payment will be pending to be processed until the guest approves the request.
Follow steps to check the payment:
- Inside the guest's reservation, go to Folio
- In the Transactions filter, select Pending
- Click Apply
- The pending payment will be in grey. In the column Type it mentions the credit card and type of the transaction Pending Payment on [gateway name]. If you need to cancel the payment, click the gear icon and select cancel.
Canceling the payment request
If you cancel the payment that is currently pending for guest's approval, the Approve and Decline links that sent in the Payment Request Email will expire and cannot be used anymore.
Follow steps to cancel the payment:
- Inside the guest's reservation, go to Folio
- In the Transactions filter, select Pending
- Click Apply
- The pending payment will be in grey. In the column Type it mentions the credit card and type of the transaction Pending Payment on [gateway name]. If you need to cancel the payment, click the gear icon and select cancel.
Canceling the payment request
If you cancel the payment that is currently pending for guest's approval, the Approve and Decline links that sent in the Payment Request Email will expire and cannot be used anymore. The following error will be displayed:
If you add a new payment using the credit card which already has a pending guest authentication, the following warning message will be displayed.
It's recommended to wait until guest authenticates or cancel the pending payment in the folio before adding additional payments. See the steps above (link to section) to cancel the pending payment.
Pending payments can't be automatically allocated even if the Payment Allocation box is checked. In this case, the payment need to be allocated after the payment is posted (authenticated by the guest) on the guest's folio.
Refer to this article to learn how to allocate the payment: Allocation of already posted transactions on the folio
Currently, it's not possible - only the main guest will receive the email, but our development team is planning to add this option in future releases.
If the guest accidentally declined the request, you can try to charge the guest credit card again, the system will send another email to the guest with the new Approve or Decline links.
When the request is declined, the links inside the email become expired. Resending the same payment request email will only send the expired links. You need to attempt another charge to send the new Approve or Decline links.
To check if you have Pending Payments that are waiting for 3D Secure authentication, you can use the following reports:
Payment Processing Report
- Navigate to Payment Processing Report
- When opening up the report you can filter by Pending Status
The system will show you the list of Pending Payments.
Payment Ledger Report
- Navigate to Payment Ledger
- When opening up the report you can filter by Pending transactions
- Or, you can simply sort by Description by clicking on the column name
In such case, the payment will need to be restarted. The following steps need to be taken:
- The guest needs to contact the property directly.
- The property needs to cancel the pending payment. See step: How can I cancel the payment with pending approval from guest?
- The property needs to try charge the card again. This resend the email with Approve and Decline links to the guest.
No, the system does not release the funds when the reservation is cancelled. The property can still capture the fund if it's still within the authorization period and in line with their cancellation policy.
The system auto-void (release) the fund after the authorization period ends (7 days for Stripe). Learn more about authorization: How to Authorize a Card With The Payment Gateway Feature
If the guest denies the payment request for Cancellation, No/Show or Non-refundable booking, the property will not be able to process the charge.
Currently, Cloudbeds PMS is not automating cancellation/no-show policies or the cancellation/ no show fees, so, it's hard to charge if the guest denies the authentication. Here we have a few recommendations to minimize this scenario:
- In Cloudbeds Booking Engine terms & conditions, inform your potential guests about Strong Customer Authentication (SCA) and 3D Secure. You can state that the guest is fully responsible for authorizing such charges and failure.
- Contact your OTAs to check if you can use virtual cards as payment options since virtual cards are not required to be authenticated by 3D Secure.
- We recommend you to collect (charge) pre-stay deposit before the actual check-in date. This means you will collect the balance in full at the time of booking. You can configure your Deposit Policy here
In House Accounts and Groups, the cards that need to be authenticated by 3D secure will trigger a modal where the Cloudbeds PMS user should enter the guest's email address.
To check if you sent the email to the correct address, access the Email Delivery Log tab.
If you realized that you sent to a wrong email address, proceed with the following steps:
- Go to the related House Account or Group Folio and cancel the pending payment. See: How can I cancel the payment with pending approval from guest?
- Try to charge the card again by adding a new payment.
3. Enter the correct email address
Stripe account allows an optional 3D Secure settings for properties not based in the European Economic Area (EEA). Check further info in this knowledge base article: 3D Secure Settings
Expedia
For further info on how Expedia handles the 3D Secure Regulations, check further information on our Expedia Connection Guide
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