Why Accommodation Providers Should Transition Away From OTA Virtual Credit Card Bookings

When a guest books through an OTA, the platform issues a single-use virtual card that you must manually process for payment. On the surface, it appears convenient because the OTA “guarantees” the money, but in reality you lose control of how and when you are paid. The process also pushes extra admin onto your team and hides the true cost of each booking behind layers of fees, FX margins and delayed settlement.

The Disadvantages of OTA VCC Bookings

1. Higher Merchant Fees
VCCs are processed as international card-not-present transactions, which attract significantly higher fees due to offshore card purchasing by OTAs to increase returns to OTAs. Combined with already significant OTA commission, these charges deeply erode profit.

Instead of paying a standard domestic card fee, you often pay a premium rate on every VCC transaction, meaning your net revenue per booking is much lower than it appears on the surface. Over a year, especially in high season, that difference adds up quickly and can quietly wipe out thousands of dollars in profit that should be staying in your business.

Many properties unknowingly pay thousands more per year.

2. Manual Administration & Staff Time
VCC workflows force staff to:

• Manually enter card numbers
• Track activation dates
• Reconcile mismatched settlements
• Reprocess expired or invalid cards

Each of these steps seems small in isolation, but together they create a clunky, error-prone process that slows the front desk down. Staff have to jump between systems, chase missing payments and spend time checking statements instead of serving guests. The more VCC bookings you receive, the more your team becomes a “payment processing department” instead of a guest-focused front office.
This increases errors and slows the front desk down.

3. Increased Chargeback Exposure
Because the VCC belongs to the OTA, not the guest, accommodation providers often:

• Can’t validate the card
• Can’t pre-authorise
• Lose dispute cases
• Have limited evidence to submit

In the event of a chargeback or dispute, the OTA is effectively sitting between you and the guest, and they are the ones who control key information and communication. You are often left trying to prove your case with less data and weaker evidence, which makes it much harder to win. When the OTA is both “merchant of record” and the party handling the guest, their interests are prioritised, not yours.

OTAs protect themselves, not you the accommodation provider.

4. Slower, Less Predictable Cash Flow
Payment only becomes available:

• After arrival or departure
• After OTA activation dates
• Sometimes days later

Instead of receiving funds in line with your own payment policies, you are stuck waiting for the OTA’s timetable. This can make it difficult to plan around payroll, bills and supplier payments because you are never fully sure when certain funds will clear. For smaller properties or seasonal operators, that uncertainty can be particularly stressful and can limit your ability to invest back into the business.

This creates unnecessary cash flow gaps.

5. No Ability to Pre-Charge or Secure Bonds
With VCCs you cannot:

• Take deposits
• Pre-authorise for security
• Charge extras before arrival
• Reduce no-show risk

This makes it harder to protect yourself against damage, incidentals or last-minute cancellations. Instead of having funds securely held or pre-approved, you are often trying to recover money after the fact, which is far more difficult. For properties with higher-risk bookings, longer stays or group reservations, not being able to reliably secure bonds exposes you financially and increases your stress.

6. Loss of Direct Guest Interaction
When OTAs control payments, you lose:

• Pre-arrival communication
• Upsell opportunities
• Trust-building moments
• Direct rebooking chances

Because the OTA sits in the middle, they essentially own the data. This reduces the number of touchpoints you have to build a relationship, personalise the stay, offer add-ons or encourage guests to book direct next time. Over time, the OTA becomes the “brand” the guest remembers, instead of your motel or hotel.

It strengthens OTA loyalty, not property loyalty.

Why OTAs Push VCCs (The Real Reasons)

OTAs aggressively promote VCCs for one reason and one reason only:
VCCs benefit the OTA far more than they benefit you.

Here’s how OTAs gain:

1. VCCs Give OTAs Total Control of the Payment Journey
This ensures OTAs maintain:

• Ownership of the guest
• Control of refunds
• Control of disputes
• Control of communication

By holding the purse strings, the OTA positions itself as the party in charge, even though you are the one providing the service. Guests are encouraged to contact the OTA for changes, cancellations and complaints, which keeps valuable data and influence in the OTA’s hands. This can also make it harder for you to resolve issues quickly, because every step has to go through the OTA’s processes.

The OTA becomes the “provider,” not the property.

2. OTAs Earn More Revenue From VCCs
Through:

• Higher commissions on “OTA collect” bookings
• Additional merchant fees
• FX margins
• Payment processing fees

Every time a VCC is used, there are multiple layers of fees and margin opportunities for the OTA. Even small percentages across millions of bookings translate to significant revenue. What looks like a convenient tool for you is actually a carefully designed revenue engine for them, built to maximise what they earn per booking.

A VCC transaction is a money-maker for the OTA.

3. VCCs Shift Risk to The Property
OTAs limit their own:

• fraud exposure
• no-show loss
• dispute liability

By collecting the guest’s money and passing it to you via a VCC, OTAs can limit their financial risk while keeping their commission. When something goes wrong, it is often the property that bears the cost, whether that is through chargebacks, late cancellations or disputes. You shoulder more of the risk, while the OTA keeps its margin.

The risk shifts directly to you (the Property).

4. VCCs Simplify Global Operations
Standardised payment handling saves OTAs:

• banking complexity
• refund processing time
• customer service resources

From the OTA’s perspective, one standardised payment method makes it easier to operate at scale across countries, currencies and banking systems. They only need to maintain one process, even if that means adding complexity at the property level. In other words, the efficiencies are captured by the OTA’s central operations, while the extra work is pushed onto your team.

All cost savings for them whilst extra admin for you.

5. VCCs Increase OTA Dependency
Guests who never pay the property directly are conditioned to rebook through the OTA.
They become familiar with the OTA’s app, emails and loyalty programs, rather than your brand or website. Over time, this means more repeat bookings flow through the OTA, locking you into paying commission again and again even for returning guests who already know your property.

It ensures ongoing commission revenue for the OTAs.

6. OTAs Use VCCs to Influence Visibility
During listing setup, OTAs recommend VCC acceptance as part of “performance optimisation.”
This creates the perception that:

• enabling VCCs boosts ranking
• more “payment options” increases visibility

This framing makes many operators feel they have no choice but to enable VCCs if they want to stay competitive. In reality, ranking is driven by other performance factors, but OTAs benefit when you believe VCCs are essential. The more properties they can push into VCC workflows, the more control and revenue they unlock.

This is strategically designed to increase OTA control and revenue and not your profit.