Streamlining Payments and Protecting Against Chargebacks: Insights from Yapstone

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Hi, welcome to the Boostly podcast. This is the podcast that gives host the tools, the tactics, the training and also the confidence so you can go out there and get yourselves more direct. We do A mini series on this podcast where we interview people and services which will help you as a host in your hospitality journey. Today we've got Chris from Yapstone. He is going to be talking to us about a service that you may wish to use which is all about the payment side of things. So I'm interested to dive in, find out more and take you on this journey. So welcome along, Chris.

Thanks Liam. Great to be here.

Chris, what would you like people to get from this episode? What would you like them to take away from this podcast?

Yeah, really, you know, the confidence and understanding of using a payment management or payment solution that is suited to their business. You know, at Yupstone we, we are very focused on short term rental and really just trying to give, give hosts the confidence of using a, a payment solution that really fits their needs and having the support at the back end that helps them with their business.

That sounds good. I mean, everybody likes payments, you know, like that's the lifeblood of the system, isn't it? So you mentioned you specifically focus on short term rentals. So I think that's a great segue into what is Yapstone and what does it do.

So, I mean, yepstone in its purest is payments management company or a payment gateway payment process. So, you know, there's so many acronyms around to describe what we do, but essentially we are the payment gateway. So in essence we would sit on a website or on a PMS and enable the PMX or the host or whomever to take a booking and then we act as the acquirer at the back end, which essentially manages the funds. But the critical thing that we really do well, and that really stems from the amount of time that we've been doing this, been in SDR for about 25 years, is really managing the payouts at the back end because that can be the really complex part of the payments journey if you like. You know, it's a single payment from, from a guest, you know, making a reservation or, you know, or installments. But actually then you've still got to make payments to your partners. You know, it could be maintenance, it could be laundry, it could be, you know, various other partners that you're working with as a, as an individual property owner or property management company or pms. So ensure then that the rent of people are getting paid the right amount at the right time.

Nice, nice. And that is quite different from some of the other processes out there which will just pop it into one place and, you know, it's harder for them because then we have to have more transactions. Our accountants as hosts are asking us what each transactions are for and things like that.

Yeah, it definitely simplifies it and you know, it allows the host then to really concentrate on what they're good at. And that's, you know, creating experience, I guess. You know, it just, it takes one area out of the equation that frankly is really important, but it's probably something that the host doesn't really want to worry about too much and we take that away from them.

And I guess two things come to mind when it comes down to payment processing is first of all, I've got to really trust the processor. And you mentioned you've been doing this for 25 years. So talk us through, you know, sort of how you've specialized in short term rental instead of, you know, all the other avenues that people could go down.

Yeah, it's a really good question. And I think our founders and co founders really saw a niche in the market as short term started to be born. It's always been around up to an extent, but we kind of seen the acceleration of it with the OTAs, booking.com, airbnb and so on. And we really saw an opportunity actually to manage payments on behalf of the larger organizations or the OTAs, but also then helping individuals drive revenues and management into their own organizations, whether every single property or it be hundreds of thousands that are listed on a booking. And we see the vertical evolve over the last few years. Certainly we're seeing an acceleration now of payment instruments and the way that people want to pay has changed quite dramatically over the last few years. Few years. You know, typically it was credit card, that was it, you know, and now we're seeing kind of an explosion into wallet based payments. So, you know, Apple Pay, Google Pay and various others. Bank transfer in the UK is becoming more, more and more prevalent and it's really enabling us to then evolve and put these payment options in front of the customers, you know, at a time, at the right time. But also then enabling us to evolve our solution to suit the property owners and, you know, and the platforms. But the critical piece and I think all property owners come across this is chargebacks where someone says the stable isn't up to standard, I want my money back, I'm going to charge that back through the card scheme or for my card issuer. We win about 80% of chargebacks that are presented to us on behalf of our customers. So we are quite happy to work with our customers to challenge those chargebacks and an 80% win. Rate is actually pretty high, especially in kind of hospitality and travel industries. And that's been built up over a long period of time. So we have the expertise in house actually to be able to say, actually, do you know what, we've got a really good propensity to win this chargeback for you. There's a lot of people who've been at so long period of time, so there's a lot of knowledge that's kind of involved, but they really care about the business as well. And so do I say that they do and I don't. But, you know, they really care about our property owners and want to help them improve their business. You know, Ulti, everybody gets paid where we get paid and the bookings made. But if we can help the front end of the website or we can make some adjustments or make some recommendations that help the host improve their own website or their, you know, friction at checkout or whatever that is, then ultimately it means that they have more bookings. You know, if they're making more money, then, you know, their partners are making more money and frankly, so are we. The more volume that comes through is better for parties.

And you mentioned chargebacks and there'll be a few people who are newer hosts and things like that. So what is a chargeback and how and why does it occur and how does y help to reduce it? Is there something you guys do different to win that 80% or is it just the expertise?

It's predominantly the expertise. But a chargeback essentially is when the consumer says that they haven't received or products or services up to a certain standard. There are a number of different reasons for charges. A common one that we see in STR is they haven't read the cancellation policy correctly. So you say if you cancel within three weeks or whatever it might be on your team terms and conditions, you don't get a refund. So people are going, well, I've cancelled my holiday, but I haven't received a refund. So they will present that and say to their car issuer and say, look, you know, I should be. I want you to charge this back to the property owner, although, because I didn't stay. But then, you know, they checked a box to say, I've read the terms and conditions. Then that problem kind of goes away because they've ticked to say that they've read the terms and conditions and therefore they're not entitled to a refund. But we do see some crazy chargeback reasons. You know, the stars weren't bright enough. You know, the Sheets were too crisp, you know, you know, the WI fi didn't extend to the beach, that kind of thing, you know, where, where people are just trying it in for reasons to try and get a apartment or refund.

Yeah.

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It's a scary thing for hosts in general because I mean I've, I've hosted well over, say getting on for about 10,000 guests now across all the properties. But out of all of them, there's one that I remember who I'm sure was trying to defraud us, you know, like was every little thing that could be mentioned from, you know, I walked in and there was a weed on the driveway to, you know, there was a crumb next the toast. You know, like they literally, the pictures of literally everything and we had actually had an inspection earlier that day from. We've got an, we've employed somebody to do inspections and they're really tough, you know, they Go in and literally I, I worry if, if I had been somewhere I would be like, oh God, the inspector. And, and people don't know the inspections coming in. But she had gone in and she picked up like one or two bits which had been corrected at a time. She hadn't picked up on anything that this guest had mentioned. And of course, inevitably, you know, they, they want to go down the chargeback route. Now, I don't know if this is absolutely true, but they didn't put in the chargeback. But I understood that because we've got signed terms and conditions, so we've got that as, as one thing which is a tick. We never just take the card details. So we, we literally never take card details and just put them through. We always send a payment link, which I understand is usually to factor authentication. Does this, does this sound like ring true? Yeah. And yeah. And then because of that, it's very hard for them to say I didn't get what I wanted, you know, because even if they've got pictures of the stay and saying it wasn't as advertised, well, they're there. We've got terms, you know, you've even got pictures of them on the ring doorbell outside, you know, like, so, you know, it was, we're well covered. They didn't put through the chargeback, but you just really felt like it was going to, going to come down to that. And the only other instance that I've had of this is in my very early days. It must have been my third ever booking from one of the big OTAs. And I understand a lot of people, especially watching this podcast or listening to this podcast, will be worried about direct bookings because of chargebacks. Like, hey, I think they think they're protected from some of the OTAs. But for this particular OTA, which just provided the card details, in the early days, where I did discharge the card details was somebody's stolen card. They'd used somebody's stolen card. And it was absolutely right that that money did go back to whoever the poor soul was who got it, you know, who had their card stolen. But for me, where this person stayed damaged the place. There was about 1400 pounds worth of damage, plus I had lost the 6, 700 pound stay through the chargeback. So I certainly learned really quickly that anything you can do to help, you know, against chargebacks, terms and conditions, signed that tick box you mentioned, and being with a card facilitator or a payment facilitator that deals with these things or can help with these things is Certainly, certainly an advantage, isn't it?

Yeah, it is. And that's exactly what we do. When I mentioned earlier that we work with our customers and partners to really try and promote and improve what they do from an operational perspective. And that boils down into terms and conditions and where they should be and various other bits and pieces that we can help with. You know, the lost and stolen cards are a different kind of chargeback, if you like. We don't tend to see so much of those now, certainly not in the UK and Europe on the card payment side, at least because of, as you mentioned, the two factor authentication or 3D secure, also common in the US. 3D secure is really well adopted, certainly in the UK, but not so much in the US. So there is more of a propensity, I would say for chargebacks in the US than perhaps in the UK and Europe and rest of world. It's kind of a little more wallet driven, I would say, which then gives you some protection as a user anyway. You've got the biometrics and all that kind of stuff if you use your wallet. So there are certain aspects you can do to safeguard your card, but actually when it comes down to it, safeguarding your business as a property owner, that it's our business as well ultimately. And you know, we care about our, our customers, we want them to be profitable, we want to help them when, when things go wrong.

So one of the things you mentioned earlier on was you, you partnered with certain property management softwares and, and almost everybody listening to this will have a property management software. And I remember my first property management software, they were like, hey, you need a card processor. And they gave me a list of three different ones and I was just like, you know, I just picked the first one off the list. That one will do. And I won't name names on, on who it was, but the steps that I had to go to set that up I haven't had since with Avocado Payment, you know, for people who take the payment. But I remember thinking at the time it is, that was quite complex. But I remember thinking I, I literally just chose one, you know, like you just go that one, you know, like chuck a dot, chuck a dot, a bit of paper or whatever. What advice would you have? Because there's going to be people who listen to this who may first of all can they check on their pms, you know, what payment providers are partnered with and is there any advice on how to choose and why they should choose? Yapstone?

Yeah, we work with a wide variety of PMSs globally and generally they'll have as you, as you say, a list of, you know, 2, 3, 4, 10, you know, different payment providers that can do a job for them. What I would say is majority of the providers that are out there will not have the experience that we have in the industry and they're focused in different areas as well. You know, we are solely focused. That's all we do is short term rent payment, you know, so we're not worried about selling T shirts or, you know, working with retail or airlines or whatever. So, you know, a dedicated resource to your business as a property owner and a host, you know, you can, that's what you can regard as I think the other piece as well, kind of weaving that into the knowledge that we have and expertise that we have is that actually we're able to onboard new customers maybe a little bit more quickly than our competitors and with less overhead in terms of paperwork. We're certainly hearing from some other providers out there right now that actually it's a real nightmare to get onboarded. They're asking for ever such a lot of information. And again, because we've got that kind of dedicated resource and knowledge, we can say actually, you know, we know what to look out for in terms of an application and whether it does look a bit funny and you know, 99% of the applications you get through will be fine. The second reason I think where we really come into play is when we can release funds. You know, as a, as a property owner, cash flow is critically important. And if you're not receiving your funds until kind of 25, 30 days after the guest has checked out, they've made the booking six months before. That's a long time to wait for your money. So what we tend to look at is settling or releasing funds after booking as opposed to either check in or check out. What that means to a property owner is that they're receiving the funds a lot earlier. There are certain bets around that that I would suggest keeping hold of the funds. Don't spend it exactly, keep hold of it. But then at least your capital is working for you. It's working capital in your bank account that's gaining. You know, we're always to keep some of it back in case of refund or chargeback, but it's, you know, but having that cash in your hand is, is really important. We're finding again that, you know, that the cash flow and sort of operational efficiency elements that we can bring to the table are really helping our, our customers and partners I think you just.

Remind me of the book that I read which was the richest man in Babylon, like years and years ago, but where the entire premise of that is don't spend it. If you know, if you need to keep it somewhere and they talk about put money in different pot. So when sales come in until that, you know, until it stays done, keep it in one pot. Once it's done, put some money in the tax pot, some money in the profit pot, you know, like as in you should know your profit margin so you can literally change and put the rest in the running costs part. And it makes it so much easier to run business. And even now I have taxpayer, you know, like we have a client, you know, as in you have to have these different areas to your business. In the very early days I just had one pot and it was a nightmare. You know, like place where all the money goes and you people go, you know, how's your business going? And you know, you open your bank and you ask really well, but it doesn't actually give you, it doesn't really tell you what the cash flow will be in a few months time where now when you put it in different pots, you can actually look at the one pot which make it, which is your profit pot and just go, okay, yes, it's okay. Or yeah, or terribly dependent on the time of year. If it's winter and cash flow slows down for a lot of hosts. But when it comes down to one of the things which our hosts will deal with a lot of the time is security deposits. And just before this podcast I was talking on a coaching call a lot about these services which will take care of security deposits for you. Like they'll, they'll offer like waiver schemes or take security deposits. But for the hosts who want to do it the old school way, just setting up through the PMS and the pms just taking the security deposit, I assume there's something that yepstone deals with all the time.

Yeah, absolutely. So you've got a couple of choices actually with the Epstone. Either you can take it the, you know, the old fashioned way. We can process it as a separate line item. You know, that's another good thing about what we, we do is you can break down each, each the costing into line items for fewer customers or for those, those different pots that you're talking about as well.

So that's a big selling point, those different pots. Because not, not many or I, I don't know of many payment processes. There might be more out there, but you know, there's certainly something which many hosts would be interested in, especially as many hosts manage for a lot of different people as well. So it just makes sense for that reason. So, Chris, is there anything else you'd like to add to this or would you like to share your details on how we can find out more?

Yeah, sure. I've really enjoyed the conversation. The best way to get hold of me is either via email, which is seeandrewsapsapstone.com or buy on my vault, which is +4479568, 23036. And I'd love to hear from you.

Awesome. And we're okay to put those in the show notes just so people can click on them if they wish?

Yeah, sure.

Somewhere around this audio or video, if you're watching on YouTube. So leaves us with our last question then, Chris, which we love to ask. This from all of our guests. Is there a motto or a mantra, a saying that you. That really resonate with you, or one that's helped you on your journey?

Yeah, I think that life is a marathon, not a sprint is kind of my mantra. And, you know, don't run with your head down too much. You know, take it in and enjoy as much of it as you can. It's a great journey and you got.

To enjoy it 100%. There's too many people. One, I mentioned these on the wall just before we started recording, and one of these says, I can't remember which one it is, but people underestimate what they can. They overestimate what they can do in a year, but underestimate what they can do in 10 years. And that is that kind of like, like you say, it's, it's a marathon, not a sprint. You just got to keep your, keep your head up. I really like that, Chris. So thank you so much for, for joining us on the podcast. And if you're a listener to this and you. You'd like to share this with friends, family, or anybody who get value and could go and use Yapstone services, please do share this with them and we will see you on the next episode of the Boosty Podcast. Thanks again.