Taking direct bookings means handling payments yourself. Here's how to choose the right payment gateway for your holiday rental — covering fees, features, fraud protection, and trust.
When a guest books through Airbnb or Vrbo, the platform handles payment entirely. The guest pays the platform, you receive a payout. Simple, but expensive — those fees are part of what you're paying for.
When a guest books directly through your own website, you need to handle payment yourself. This is more work to set up, but it means you collect full payment upfront, hold the funds, and keep significantly more of each booking's revenue.
Choosing the right payment gateway is one of the most consequential technical decisions for a direct booking website. Get it wrong and you'll have:
Get it right and payments become invisible — guests pay effortlessly, funds arrive in your bank account reliably, and you have clear controls over deposits and refund policies.
A payment gateway is the technology that securely transmits payment information between your booking website, the cardholder's bank, and your bank. It handles:
For most holiday rental direct booking sites, the payment gateway is provided by a payments processor who handles all of the above as an integrated service.
Payment processors charge a fee per transaction, typically expressed as a percentage plus a fixed amount per transaction (e.g., 1.4% + 20p for European cards, 2.9% + 30p for US cards on many platforms).
For holiday rental payments — which are typically high-value, infrequent transactions — percentage fees matter more than they would for a high-volume, low-value e-commerce business. On a £2,000 booking, 1% vs 2.9% is the difference between paying £20 and £58 in processing fees.
What to look for:
Holiday rental bookings often require:
Not all payment gateways handle this well. You need to be able to:
Guests who book through Airbnb are accustomed to a polished, trusted checkout experience. When you ask them to pay via an unfamiliar website, trust is critical. The payment gateway brand plays a role:
The checkout experience should be:
All businesses that take card payments must comply with PCI DSS (Payment Card Industry Data Security Standard). The good news: if you use a reputable hosted payment page or embedded payment widget (as all major processors offer), PCI compliance is largely handled by the processor. You must never store raw card numbers yourself.
Chargebacks — where a guest disputes a charge with their card issuer — are a risk in holiday rentals, particularly around cancellations. Your payment processor's chargeback policies and support matter:
Best for: Technically capable hosts who want flexibility and low fees
Stripe is the developer-favourite payment processor and has become the backbone of a huge number of booking and e-commerce platforms. It's highly capable, well-documented, and has competitive rates.
UK pricing (2025): 1.5% + 20p for UK/European cards; 2.9% + 30p for other cards. No monthly fee for standard accounts.
Strengths:
Weaknesses:
Verdict: The best choice for most direct booking setups, especially if your booking platform (like LetPilot) has Stripe integration built in.
Best for: Maximum guest recognition, guests with stored PayPal accounts
PayPal has unmatched brand recognition and the convenience factor of allowing guests to pay without entering card details (using their PayPal balance or stored payment method). For guests who are less confident entering card details on unfamiliar websites, PayPal can improve conversion.
UK pricing (2025): ~1.9% + 30p for standard card transactions via Braintree (PayPal's developer API); higher fees via the standard PayPal Checkout button.
Strengths:
Weaknesses:
Verdict: Good as a supplementary payment option alongside a card processor; less ideal as your primary gateway due to fee and dispute dynamics.
Best for: Hosts who also take in-person payments at a physical location
Square is excellent for retail and restaurant businesses but is a secondary choice for online-only holiday rental bookings. Its online payment fees are competitive, but its API and integration ecosystem are less mature than Stripe's for the types of complex booking flows (staged payments, holds) that holiday rentals need.
Verdict: Not the natural first choice for holiday rental direct bookings unless you have a specific reason for the Square ecosystem.
Best for: Taking bank transfer (direct debit) payments rather than card payments
GoCardless processes bank-to-bank payments (direct debits) rather than card transactions. This has lower fees than card processing (typically 1% capped at £2 for UK transactions) but adds friction for guests who aren't familiar with direct debit authorisation flows.
Some holiday rental hosts use GoCardless for balance payments from returning guests who've authorised a mandate — it's very cheap for repeat transactions. For first-time bookings, card payments typically convert better.
Verdict: Valuable as a secondary payment option, particularly for balance payments on confirmed bookings.
Security deposits are one of the trickiest aspects of holiday rental payments. Options include:
With Stripe, you can place a hold on a guest's card for the security deposit amount. The hold reserves the funds without actually charging them. If there's no damage, you release the hold and the guest never pays anything. If there is damage, you capture the hold up to the authorised amount.
This is the most guest-friendly approach and the most likely to convert booking intent into a completed reservation — guests are much more comfortable authorising a hold than actually paying a bond upfront.
Limitation: Card holds expire (typically 7 days), so this only works for a security hold placed close to check-in, not months in advance.
Charge the security deposit separately from the booking payment and refund it after check-out. This is simple to implement but creates friction — guests see real money leave their account.
Some hosts forgo a traditional deposit in favour of a small non-refundable 'damage waiver' fee included in the booking price. This is friction-free for guests but provides limited protection for hosts.
LetPilot handles payment processing via Stripe as part of your direct booking setup — deposits, balances, and security holds are built into the platform so you don't need to configure payment flows yourself. It's the simplest way to take professional, secure direct bookings without writing a single line of code. Try LetPilot free at letpilot.co — no credit card required.