Cloudbeds Payment Processing Options Explained

Cloudbeds PMS and hospitality management platform is unique in the sense that it integrates with so many different credit card processors. 

There are seven direct integration options in the US alone, over ten when you look internationally, and even more when you factor in the gateway connections. That’s a lot when you compare it to market alternatives like GuestSuites, which only integrates with a single payment processor. 

But each one of these processors is unique in terms of the setup, and most importantly, your cost. 

So don’t make the mistake of thinking you can just pick one and move on. For a popular hotel doing tens of millions per year, this decision can easily be the difference in hundreds of thousands saved or lost.

I have extensive experience with all of these providers, so you can use my insights to figure out the best option for you.

Ideally, you’ll want to keep your own processor. I’ll show you how to do that, too. 

Cloudbeds Payments

Cloudbeds offers its own branded payment solution, which is included with every plan. 

It may sound like a no-brainer to just use this to “get everything under one roof.” But there’s more happening here than meets the eye.

Cloudbeds Payments is actually a DBA of Digital Arbitrage Payments, which is clearly stated in the terms of service. It appears this was set up solely to separate the Cloudbeds software from the payments service.

Second, Cloudbeds doesn’t actually process your credit card payments. They rely on one of two providers to handle this on the backend:

• Stripe
• Adyen

These providers are not interchangeable. The entire contract setup and cost structure are very different when you dig into the details. 

Regardless of which option you choose, make sure you opt for the cost-plus pricing structure (this is IC+). Cloudbeds Payments also offers “blended rates” but that’s a flat-rate model that will always be more expensive. 

Let’s look a bit closer at the differences between Stripe and Adyen powering your payments behind the scenes:

Stripe (via Cloudbeds Payments)

Stripe is typically the default setup option for hotels inquiring about Cloudbeds Payments. Using Stripe via Cloudbeds Payments is somewhat of a hybrid structure or PayFac-as-a-Service. 

Cloudbeds onboards you natively, but you still have your own Stripe Connect account. 

This means that you have your own Stripe account with its own contract, which is different from a true PayFac model where the sub-merchant would be invisible to the processor. 

But Cloudbeds sits on top of that relationship, controlling the UX, underwriting decisions, fee structure, and fund flows. Simply put, it’s going to be slightly more expensive because there are more mouths to feed. 

Adyen (via Cloudbeds Payments)

The Adyen arrangement with Cloudbeds Payments is a straightforward PayFac setup. This means that you don’t get your own independent Adyen merchant account, and your entire relationship with Adyen flows through Cloudbeds.

Rates in the default agreement are advertised as low as 1.40% + $0.20 per transaction in its Adyen agreement. But that rate is lower than interchange for most card types (meaning it will be rare if you actually get this price). There’s an additional 2.55% for specialty cards, which includes Amex, Discover, corporate cards, and rewards cards. 

Additional: meaning it’s 3.95% + $0.20 per transaction total. Which is outrageously high. 

The contract also says mid and non-qualified transactions are subject to this additional fee. Any time those terms are used in a contract it’s a bad sign. It essentially gives your processor the right to arbitrarily determine buckets for each transaction, and they’re incentivized to charge you the higher rate. 

There’s also a 1% currency conversion fee, which can be brutal if your hotel caters to international travelers paying in non-USD. You could be pushing nearly 5% per transaction, which is absurd (and far from the 1.40% used to draw you in).

While Adyen is one of the best processors on the market today in terms of their prices and technology, this isn’t actually an Adyen agreement. Cloudbeds is setting your rates, and the fact that Adyen is handling transactions ends up being irrelevant for you if you’re stuck paying these high prices. 

Elavon

Elavon is one of the most popular merchant services providers out there, which is good news if you’re among the 2+ million merchant accounts in its portfolio.

You can continue using Elavon and integrate with Cloudbeds through the Elavon Converge Gateway.

Elavon’s pricing has always been reasonably fair. They increase rates, about once per year, but you should be able to maintain a decent deal if you get a good price from the jump. 

That said, you should be aware of a few billing tricks that Elavon uses to pad its profits.

A big one for hotels is Elavon’s international card handling fee. Despite Elavon using the card network’s name in the fee (Ex: Mastercard INTL Card Handling) and itemizing it along legit card brand fees, this is a processor-imposed markup that will cost you an additional 0.60% per transaction whenever you accept non-US issued cards.

It can be a serious burden for hotels with international clientele. So if you spot those fees on your statement, be sure to contact Elavon ASAP to get it removed.

Fiserv

This integration stems from Cloudbeds integrating with First Data. But following Fiserv’s acquisition of First Data back in 2019, those accounts are now under Fiserv’s management and the integration extends there as well.

Fiserv is a very good processor, which is saying a lot coming from me. I’m notoriously tough on processors but I have no problem admitting that Fiserv is definitely one of the better ones. 

You can get competitive IC+ pricing without junk fees. And they don’t increase rates nearly as often as their competitors.

This is also a great option if you like Clover POS systems. While Clover isn’t known for hotel credit card processing because it lacks some of the dedicated features you need at the front desk, it’s solid for on-site restaurants, bars, and gift shops. 

One thing that’s tricky about Fiserv is that lots of their contracts contain strict early termination clauses. We don’t typically see a reason for you to cancel, but if you want to maintain flexibility, that’s something to keep an eye on.

Stripe

In addition to powering Cloudbeds Payments, you can also integrate with Stripe with Cloudbeds on your own, without the hassle of adding a third party to the mix.

If you like Stripe or you’re already using it, this option is 100x better than going through Cloudbeds Payments. 

It’s a more traditional integration where the software provider (Cloudbeds) and processor (Stripe) are completely independent of each other. You have your subscription with Cloudbeds and they have nothing to do with your relationship with Stripe other than supporting the API.

Use a Gateway Integration to Keep Your Own Processor Whenever Possible

Beyond the direct processor integrations above, Cloudbeds also integrates with two popular payment gateway services: Authorize.net and PayPal Payflow.

Between these two gateways, you can integrate with basically every major processor in the US, including:

• Worldpay
• Global Payments
• TSYS
• Heartland
• Vantiv
• Chase Payments
• MerchantE Solutions
• North (American Bancard)
• Cayan
• Dharma Merchant Services
• EVO Payments
• Payment Cloud
• Wells Fargo Merchant Services

This effectively means you can use any payment processor to integrate with Cloudbeds. There’s an added gateway fee, but it’s marginal and well worth it so you don’t have to consider switching providers for an integrated setup.