3570 Forum hotels

Introduction

• What it is: This MCC code covers businesses primarily engaged in operating hotels, inns, and other lodging facilities.
• Risk level: Medium — Potential for higher chargeback rates due to customer stays.
• Acceptance difficulty: Medium — Inconsistent transaction patterns may pose challenges for some PSPs.
• Typical business models: conference hotels; boutique hotels; inns; business-oriented lodging; resort hotels.
• For merchants: Expect moderate MDR rates; possible reserve requirements; straightforward application processes with some PSPs.
• What PSPs expect: Proof of business registration; quality website with detailed service offerings; compliance with hospitality industry standards.

Payment Insights & Benchmarks

Merchants in the forum hotels MCC should anticipate a distinct payment landscape with unique challenges. Payment acceptance can be influenced by various factors, including customer demographics, geographic considerations, and fraud prevention measures.

Payment methods

Cards: widely used, but transactions may be subject to higher scrutiny and varied approval rates.

• E-wallets: useful for convenience, particularly among younger travelers, though not universally accepted.
• Bank transfers: secure option preferred by some customers, but can lead to delays in confirmation.
• Prepaid and gift cards: popular for customer privacy but come with limitations on their acceptance.

Authentication & security

Strong Customer Authentication (SCA) is frequently required, particularly for online bookings.

• The implementation of 3DS can help mitigate unauthorized transactions but may impact seamless user experience.
• Continuous fraud monitoring is essential, focusing on booking patterns and user behavior.

Benchmarks (indicative, not guaranteed)

MDR: generally higher than standard e-commerce rates due to increased fraud risk.

• Rolling reserves: may be applicable, especially for new merchants or those with chargeback concerns.
• Settlement time: typically longer, potentially over 5 days depending on the payment method.
• Chargeback ratios: can be elevated due to the nature of the business and booking disputes.
• Approval rates: generally lower for card transactions compared to e-wallets and local alternatives.

Key metrics to monitor

Payment method authorization rates segmented by channel.

• Reason codes for transaction declines to identify patterns.
• Chargebacks categorized by reason to distinguish between fraud and service issues.
• Booking frequency and average value to assess customer behavior trends.

Risk & Compliance

Merchants operating under the MCC 3570 (Forum Hotels) are subject to heightened scrutiny due to potential risks associated with bookings and customer interactions. PSPs and acquirers typically implement rigorous measures to combat fraud, chargebacks, and ensure compliance with AML/KYC regulations.

Chargebacks & fraud

Common types of fraud include friendly fraud (customers claiming they did not authorize a transaction) and false cancellations of bookings.

• Chargeback disputes often arise from dissatisfaction with services or discrepancies in pricing.
• Mitigation tools such as behavioral analytics, transaction monitoring, and chargeback alerts can help identify and address potential issues early.

AML/KYC expectations

Strong identity verification procedures are essential, including thorough checks against sanctions lists and identification verification.

• Monitoring of source-of-funds is necessary, particularly for high-value bookings or unusual payment patterns.
• Triggers for manual reviews may include frequent or large transactions, inconsistent booking patterns, or payments from high-risk jurisdictions.

Operational red flags

Lack of transparency regarding ownership or operational control can raise concerns for PSPs/acquirers.

• Use of multiple payment methods in a short timeframe or from the same IP can suggest potential fraudulent behavior.
• Not having clear cancellation, refund policies, or customer support accessibility can lead to customer disputes and increased chargeback rates.
• Insufficient information on the website regarding the hotel's safety measures, amenities, or service quality may deter customers and result in disputes.

Onboarding Checklist

Merchants operating under the MCC code 3570 should prepare a comprehensive onboarding package before engaging with PSPs or acquirers. A well-organized submission not only enhances the likelihood of approval but also streamlines the review process.

Legal & corporate documents

company registration and incorporation documents

• disclosure of beneficial owners (UBO) and corporate structure
• valid licenses for operating hotels and related services
• policies: Terms of Service, Privacy, AML/KYC, Refund Policy

Financials & risk management

recent financial statements and cashflow forecasts

• liquidity planning or reserve model for bookings
• description of antifraud measures and monitoring tools

Product & marketing

demo access or screenshots of the hotel booking platform

• marketing strategy and overview of traffic sources (OTAs, direct bookings)
• geographic targeting information for hotel services
• KYC flow details, including identification methods for guests

Technical integration & security

overview of payment architecture with supported methods/providers

• description of 3DS/SCA flows and tokenization processes
• PCI DSS compliance status and policies for data storage

Operations

customer support setup, including coverage hours and languages offered

• SLA for handling customer disputes and chargeback processes
• booking and cancellation policies, including customer limits
• internal procedures for managing customer complaints and feedback

Regulation & Licensing

Licensing and certification are essential for merchants in this MCC, as payment service providers (PSPs) and acquirers require proof of compliance to ensure safe and legal operations. Recognition of licenses is primarily influenced by the merchant's jurisdiction and their target markets.

Operator licenses

Local hotel and tourism licenses — generally required to operate legally within specific jurisdictions, recognition varies by location.

• Health and safety permits — typically mandated for accommodation providers, depending on local regulations.
• Food service licenses — necessary if the hotel has an onsite dining facility, often required by health authorities.
• Business operation licenses — local governmental licenses are typically needed, reflecting regulatory standards of each area.

Geo-restrictions

Certain regions may impose restrictions on foreign ownership of hotels and lodging, which can affect operations.

• Locations with strict zoning laws may limit hotel operations or expansions.
• Countries with complex visa and travel restrictions may indirectly impact hotel transactions and bookings.

Certifications & audits

Compliance with PCI DSS if handling payment card transactions to ensure data security.

• Regular health and safety inspections as part of hospitality compliance.
• Fire safety and emergency preparedness audits to meet local regulations.
• Employee training certifications in hospitality standards and safety practices may be required.

Official Definitions & Network Comparisons

This section shows how major card networks define this MCC and highlights practical differences that affect merchant onboarding.

Explanation:

While the definitions across networks are broadly similar, terms like "lodging establishments" and specific mentions of amenities like restaurants may affect classification. Most networks require valid licenses to operate within certain jurisdictions, and some may need extra documentation for high-risk areas. Common rejection reasons can include insufficient information about provided services and failure to meet local compliance standards.

Alternative MCC Codes

Merchants often confuse this MCC with other categories. The table below shows which codes are related, why they are confused, and what risks misclassification brings.

Rule of thumb for merchants:

If your business provides temporary lodging with supporting amenities, ensure you are correctly classified under MCC 3570. Misidentifying your services can lead to significant compliance issues and potential account rejections.

Best Practices for Merchants

Merchants operating under the MCC 3570 (Forum Hotels) must prioritize effective management of their payment processes, operational transparency, and fraud mitigation strategies. Adhering to the best practices outlined below not only enhances customer trust but also fosters long-term relationships with payment service providers.

Classification & transparency

always use the correct MCC; attempts to bypass classification often lead to account closure

• clearly display information regarding cancellation policies, fees, and grounds for non-refundable bookings on the website
• maintain transparent business models by providing detailed descriptions of offered rates and services

Fraud & chargeback reduction

implement 3DS or step-up authentication for online bookings, especially during peak travel seasons

• utilize clear billing descriptors alongside instant email confirmations and responsive customer service for inquiries
• log transactions and customer interactions to create a robust record for dispute resolution

Payment acceptance optimization

support multiple payment methods (credit cards, debit cards, digital wallets, etc.) to cater to diverse customer preferences

• route bookings based on geographical locations and regularly test performance across various payment providers
• employ separate merchant IDs (MIDs) for different types of services (e.g., accommodations, event bookings) to align with scheme requirements

Operational discipline

monitor KPIs such as booking conversion rates, payment authorize rates, and chargeback ratios to identify areas for improvement

• conduct regular compliance audits and ensure staff is trained on updated policies and operational procedures
• establish a dedicated team for handling payment disputes, ensuring prompt responses and adherence to service level agreements (SLAs)

Payouts & liquidity

maintain adequate liquidity buffers to accommodate rolling reserves and periods of increased cancellations or disputes

• automate anti-money laundering checks for significant withdrawals, particularly during high-traffic seasons
• continuously assess payout processes to identify and address any irregularities in withdrawal behaviors

Business Scope & Examples

This MCC encompasses businesses primarily focused on providing lodging accommodations, such as hotels, motels, and resorts. Merchants classified under this code typically provide services directly related to the hospitality sector, including the booking and rental of rooms for overnight stays, as well as associated amenities and services.

Models

full-service hotels (offering rooms, dining, and event services)

• motels (affordable roadside accommodations)
• resorts (providing recreational facilities alongside lodging)
• boutique hotels (unique, themed lodging with personalized service)
• extended stay hotels (offering longer-term accommodations with amenities for travelers)

Borderline cases

Vacation rental properties — platforms like Airbnb or Vrbo offering private home rentals; may not fit if operators do not officially classify as hotels.

• Hostels — budget accommodations with shared dormitory-style facilities; sometimes classified differently depending on services offered.

Signals for correct classification

business primarily provides rental of rooms for overnight stays

• on-site amenities include dining or recreational services exclusively for guests
• guest reservations are managed through a centralized system, confirming the hotel nature of the business