3693 Drury inns

Introduction

• What it is: This MCC is designated for hotel and lodging services provided by Drury Inns.
• Risk level: Medium — Hotels are often subject to fluctuating occupancy rates.
• Acceptance difficulty: Medium — Competitive market makes acquiring merchant accounts moderate in difficulty.
• Typical business models: hotels; inns; suite hotels; extended stay accommodations.
• For merchants: Expect average MDR rates; potential for reserve requirements based on booking trends; may need to provide financial statements.
• What PSPs expect: Proof of business establishment; documentation for occupancy rates; a clear refund and cancellation policy.

Payment Insights & Benchmarks

Merchants in the hotel and lodging industry, particularly those under this MCC, should prepare for variable payment experiences due to the nature of transactions and customer behaviors. Payment success can be influenced by factors such as booking channels, fraud prevention measures, and industry trends.

Payment methods

Cards: widely used, but often subjected to higher declines due to fraud checks, particularly from foreign cards.

• E-wallets: gaining traction, especially among mobile users; acceptance may vary by region.
• Direct Debit: frequently utilized for deposits or advanced bookings, though not universally adopted.
• Gift cards and travel credits: common for customer retention and promoting repeat stays.

Authentication & security

3DS (Three-Domain Secure) is commonly implemented to combat card-not-present fraud.

• Strong customer authentication (SCA) may be required, adding friction during the booking process.
• Continuous fraud monitoring is essential, especially considering high-value transactions and chargeback risks.

Benchmarks (indicative, not guaranteed)

MDR: generally higher than standard e-commerce due to the nature of travel-related transactions.

• Rolling reserves: often set at 1-3% of overall transaction volume due to chargeback risk.
• Settlement cycles: typically longer than average, often spanning 5 to 14 days.
• Chargeback ratios: relatively high, especially due to customer disputes related to cancellations.
• Approval rates: can be lower than retail averages, largely influenced by geographic targeting.

Key metrics to monitor

Cancellation and no-show rates alongside authorization metrics.

• Decline reasons grouped by payment method and geographical origin.
• Chargeback trends, particularly distinguishing between legitimate disputes and fraud.
• Average transaction value and revenue trends per booking method.

Risk & Compliance

Merchants classified under MCC 3693, which pertains to lodging and accommodations like Drury Inns, face specific risks that necessitate robust compliance measures. PSPs and acquirers closely monitor these businesses for potential fraudulent activities and chargebacks, requiring a proactive approach to risk management.

Chargebacks & fraud

High prevalence of friendly fraud, where guests dispute legitimate charges by claiming they didn’t approve the transaction.

• Occasional use of stolen credit cards for booking rooms, particularly in online reservations.
• Emerging trends in booking cancellations followed by immediate rebookings, aimed at exploiting lenient cancellation policies.
• Common fraud-mitigation tools include chargeback alerts, velocity checks, and fraud detection software.

AML/KYC expectations

Enhanced customer identity verification (IDV) processes, including government-issued ID checks and cross-referencing against sanctions lists.

• Ongoing monitoring of customer transactions for irregular patterns, such as atypical payment methods or high-frequency bookings.
• Triggers for manual review may include high-value bookings, frequent stay alterations, or payments from multiple countries.

Operational red flags

Lack of clarity in ownership structures, particularly in franchise operations that may have multiple layers of management.

• Failure to implement transparent cancellation and refund policies, which can lead to disputes and chargebacks.
• Inadequate adherence to local laws regarding guest registration and data privacy (e.g., not retaining guest identification records if required).
• Limited response systems for customer inquiries or complaints, which can escalate issues leading to disputes and chargebacks.

Onboarding Checklist

Merchants under the MCC code 3693 should prepare a complete onboarding package before approaching PSPs or acquirers. A well-structured submission improves approval chances and shortens review times.

Legal & corporate documents

company registration and incorporation documents

• disclosure of beneficial owners (UBO) and corporate structure
• valid licenses for the relevant business activities
• policies: Terms of Service, Privacy, AML/KYC, Refund Policy

Financials & risk management

recent financial statements and cashflow forecasts

• liquidity or reserve model for payouts
• description of antifraud setup and monitoring tools

Product & marketing

demo access or screenshots of the live platform

• marketing plan and traffic source overview
• geographic targeting information
• KYC flow details, including IDV providers and thresholds

Technical integration & security

payment architecture overview with supported methods/providers

• description of SCA/3DS flows, retry logic, and tokenization
• PCI DSS compliance status and data storage policy

Operations

customer support coverage (languages, 24/7 if available)

• SLA for dispute handling and chargeback response
• deposit and payout limits; self-exclusion mechanisms
• internal process for chargeback investigation and documentation

Regulation & Licensing

Licensing and certification are critical for merchants in this MCC, as PSPs and acquirers will require proof of compliance before onboarding. Recognition of licenses depends heavily on the merchant’s jurisdiction and the markets they target.

Operator licenses

State lodging licenses — often required in the U.S. to operate hotels and inns, with recognition varying by state.

• Local business permits — necessary for operating within city or county jurisdictions.
• Health and safety licenses — required to ensure compliance with health regulations, awarded by local authorities.
• Alcohol licenses — needed if the establishment serves alcoholic beverages, with variations based on local laws.

Geo-restrictions

Some regions may have restrictions on hotel capacity or operational hours, affecting service.

• Local jurisdictions may impose unique taxes or fees for lodging businesses which can impact operations.
• Cross-border travel restrictions may affect bookings from certain countries or regions.

Certifications & audits

PCI DSS compliance for handling credit card transactions securely.

• Health inspections and certifications to maintain compliance with food safety regulations.
• Fire safety audits to ensure compliance with local safety standards.
• Annual business license renewals and inspections mandated by local authorities.

Official Definitions & Network Comparisons

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

Explanation:

The MCC 3693, associated with lodging establishments like Drury Inns, has definitions that vary slightly across networks. While Visa and Mastercard emphasize the requirements for services and compliance, American Express may focus on property types which can indicate higher risk. Differences in how networks classify lodging services affect onboarding processes, especially regarding jurisdictional regulations and document requirements. Common denial issues often arise from insufficient documentation, lack of local permits, and the nature of the establishment's operations.

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:

Always classify your business based on the primary service offered. If your establishment provides overnight accommodations as a hotel, use MCC 3693. Misrepresenting your service type to fit a different MCC can lead to processing issues and potential account termination.

Best Practices for Merchants

Merchants under the MCC code 3693, specifically within the context of Drury Inns, must prioritize effective management of payments and operational integrity to foster trust with consumers and payment service providers. By adhering to the best practices outlined below, businesses can mitigate risks, enhance payment acceptance, and maintain robust relationships with their payment partners.

Classification & transparency

always use the correct MCC; correct classification is vital to prevent account restrictions

• display clear policies regarding reservations, cancellations, and guest services on the website
• maintain transparency in your business model and billing descriptors to build trust with customers

Fraud & chargeback reduction

implement 3DS or step-up authentication for transactions that exhibit high-risk signals such as unusual locations or transaction sizes

• employ clear billing descriptors that match customer expectations and provide timely confirmations via email or SMS
• log transaction details and customer interactions to support dispute resolution and representments effectively

Payment acceptance optimization

offer multiple payment methods (credit cards, debit cards, mobile wallets, etc.) to accommodate diverse customer preferences

• optimize payment routing based on geographic data or transaction type to improve approval rates
• consider utilizing separate MIDs for different service categories or locations to better manage compliance and performance metrics

Operational discipline

regularly track key performance indicators (KPIs) such as authorization rates, chargeback ratios, and customer retention metrics

• conduct routine compliance audits and keep payment processes updated to reflect best practices
• designate a team or individual responsible for managing disputes to ensure prompt and efficient resolution

Payouts & liquidity

maintain sufficient cash reserves to manage rolling reserves and delayed payouts effectively

• automate AML checks for both customer transactions and withdrawal requests to streamline compliance
• monitor withdrawal patterns and velocity to promptly identify and address any suspicious activities

Business Scope & Examples

This MCC encompasses businesses primarily involved in providing lodging and accommodation services. Merchants classified under this category typically operate establishments where customers make payments for housing not including long-term rentals. The scope includes various types of lodgings, primarily focusing on those offering short-term stays.

Models

hotels and motels

• inns and bed and breakfasts
• resorts and vacation rentals
• extended-stay accommodations

Borderline cases

Vacation ownerships — businesses selling timeshares may have overlapping characteristics but are often classified under specific vacation property codes.

• Hostels — while they offer lodging, their primary customer base and shared-room model might lead to different classifications.

Signals for correct classification

customer pays for short-term lodging services

• establishment provides amenities such as daily housekeeping or breakfast
• payments do not require a long-term lease agreement