Streamlining Payments and Protecting Against Chargebacks - Insights from Yapstone

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 bookings. 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 Epstone. He is going to be talking 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.

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

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, yeah, its purest form is a payments management company or a payment gateway payment processor. 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 PMS 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, we've been in STR 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, it's a single payment from a guest making a reservation or installments. But actually then you've still got to make payments to your partners. It could be maintenance, it could be laundry, it could be various other partners that you're working with as an individual property owner, property management company or a pms. So ensure then that the relevant 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 hosts then to really concentrate on what they're good at and that's creating experiences for their guests. 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 for 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 how you've specialized in short term rental instead of all the other avenues that people could go down.

It's a really good question and I think our founders and co founders really saw a niche in the market as short term rental kind of 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, with 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. You know, whether that be a single property or be hundreds of thousands that are listed on, on a booking. And we've seen it, you know, the vertical evolve over the last few years. I mean, certainly we're seeing an acceleration now of sort of payment instruments and the way that people want to pay has changed quite dramatically over the last few years. You know, typically it was credit cards 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 other 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 timely, at the right time, but also then enabling us to evolve our solution to suit the property owners 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. And it's really. 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 evolved, but they really care about the business as well, and so do I. I'm not saying 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, ultimately everybody gets paid when we get paid and a booking's 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 and, you know, if they're making more money, then, you know, their partners are making more money and frankly, so are we parties.

And you mentioned chargebacks and I know 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 Yapstone 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 chargebacks. A common one that we see in STR is they haven't read the cancellation policy correctly. So, you know, so 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, to the property owner or the host because I didn't stay. But then it, you know, if they've checked a box to say, I've read the terms and conditions, then that problem kind of goes away because they've ticked the box 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 or, 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 on for reasons to just try and get a, a part refund.

Yeah, 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 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 to the toast. You know, like they, they literally took pictures of, of literally everything. And we had actually had an inspection earlier that day from. We've got in, we've, we employ 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 clean I would be like, oh God, the inspector. And, and people don't know inspection coming in. But she had gone in and she'd 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 one thing, which is a ticket. We never just take the card details, so we, we literally never take car details and just put them through. We always send the payment link, which I understand is usually two 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 want, 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, we'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 gonna, gonna 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 more 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, it 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'd lost the 6, 700 pound stay through the chargeback. So I, 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, you know, deals with these things or can help with these things is certainly, certainly an advantage, isn't it?

Yeah, it is. And you know, that's exactly what we do. You know, when I mentioned earlier, you know, 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 the terms and conditions and, you know, where they should be and, you know, 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, which, you know, 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, not so common in the US. 3D secure is really, well, 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, in the UK and Europe and rest of the world is kind of a little bit more wallet driven, I would say, which then gives you, gives you some protection as a, as a user anyway. You know, you've got the, 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 is, is, you know, it's, it's, it's our business as well.

Thank you so much for, for joining us on the podcast. And, and if you're a listener to this and you'd like to share this with friends, family or anybody would 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 Boostly podcast. Thanks again.

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