Interview
Technology / Internet services
We sat down with Jon Leon Guerrero, Account Executive of VacationRentPayment a leading electronic payment processor in the U.S. vacation rental industry. Jon has been in the electronic payments industry since 1997.
Jon Leon Guerrero of vacationrentpayment
VacationRentPayment provides credit, debit and ACH processing services. Founded in 1999, San Francisco based VacationRentPayment currently operates five offices in the United States. We asked questions about the usage of credit cards in the VR industry and the business model itself.
VRIN: Who are your customers?
Jon: We operate exclusively in the property management business, with residential and vacation rental property managers - over 600 of them - as the bulk of our client base. We do have a handful of private owners who have multiple properties on our roster as well, but most of our clients are larger organizations.
VRIN: Why should owners of vacation rental properties use credit card as form of payment?
Jon: Credit cards are increasingly becoming the consumer-preferred form of payment for larger-ticket items. Everyone loves rewards points, and consumers are more hesitant now to send checks in the mail for anything. As the clientele for vacation rentals is getting younger and shifting generations, fewer consumers even carry a checkbook.
VRIN: How does your service work. If I’m an owner what will happen exactly once I sign up with your service:
Jon: We offer a virtual terminal solution - no need to rent equipment, like a credit card terminal - and integrate with most of the more common reservation software options in our industry, for example LiveRez, Instant, Barefoot, RentOne, RNS, Vacation Rent Pro, just to name a few.
VRIN: What are the costs of the service?
Jon: We charge a low flat rate for all Visa, MasterCard and Discover transactions. We determine that rate for each client’s needs, based on software gateway requirements, volume, transaction type history and chargeback history, and we gather that data by reviewing 6-months of statements provided by perspective clients. The determining factors vary greatly by the needs and customer base of each property manager. However, because of the processing trends that are inherent in the vacation rental industry, and because unlike other processors we know our customers’ core business so well, we find our rates to be the lowest around, usually by a very wide margin.
VRIN: What are the challenges for spreading out the use of credit card payments within the vacation rental industry? Why is the usage currently still limited?
Jon: The vacation rental industry includes some very established organizations that are doing business as they always have, and who have a repeat-customer base that has allowed them to do so. As those repeat guests get older and are replaced by the next generation of renters, we’ll see the market necessitate the modernization of payment mechanisms just like every other industry. That next generation plans and books their travel and lodging at their desks, and is increasingly demanding the online buying experience similar to the one you have when you make a reservation at a hotel. We all tend to spend more freely when we use cards as well, so the upsell opportunities for property managers (bigger properties, longer stays, more additional ammenities) are more ripe.
VRIN: Anything else you would like to tell about your service? What are your future plans?
Jon: The integrated gateway option and our industry focus make us the most sensible solution for most property managers. Being, usually, the least expensive solution gives an important, and usually substantial, quantifiable value to our product. Finding out how much we can save is as simple as providing a few merchant statements for our analysis, which we give in writing. We also do not have cancellation or early termination fees, so we must earn every client’s business every single day and keep them happy to employ us. We are also PCI Compliant (our annual audit was just completed last month, and we passed with flying colors), and voluntarily subject our systems and procedures to the more rigorous SAS70 Type II audit.
VRIN: Thank you for the interview!
Jon: Thanks right back, for keeping the folks in our industry in touch with the trends, and helping us all stay abreast with what’s going on out there. Keep up the good work.
You can reach Jon at jon@rentpayment.com
Tags: VacationRentPayment
Here are a number of very interesting observations, including the increase in upsell opportunities with the use of credit cards. This is an excellent secondary advantage along with the increased primary convenience for both client and manager. This is likewise some of the rational for online booking .