The COVID19 pandemic made a significant impact on how travelers interact with and stay in hotels. Changing guest payment habits is a top accelerator for hoteliers to adopt more digital or contactless forms of payment processing.
A recent SKIFT research identifies several factors including changing traveler payment habits, innovations in fintech, more hotel tech vendors moving into payment solutions, fraud prevention and tokenization tools, and growth of the B2B payment segment, that are accelerating the adoption of contactless payment tools in hospitality.
As hospitality finally comes out of the pandemic every hotel operator & hotel management group will be looking to increase their revenue streams. Digital payment solutions are more convenient, secure, and compliant payment processing mediums for hoteliers.
The simplicity of tapping a smartphone screen or simply touching a smartphone NFC antenna to a POS machine to make payments is an attractive scenario for both hoteliers and guests.
Web based payment gateways have been even more popular worldwide, looking at the massive success of eCommerce giants. eCommerce Superstores like AliExpress, Amazon, Lixada, eBay, and many others have already shown the prowess of digital payments, embedding this solution in each of their success stories.
In their recurring two year surveys from 2020 and 2021, Oracle Hospitality & Skift Research concluded that digital payments were the 3rd most demanded feature by guests from hotels, the other two being digital check-in and mobile room key access.
Five Trends That Will Change Payments in 2022
In their December 2021 article Economic Evolution: Five Trends Primed to Disrupt Payments economic insight & trend providers, Synchrony, discuss that digital payment solutions will be more influential for businesses in a post pandemic world.
Synchrony identifies five important payment trends that will change the way travelers will conduct transactions in the near future. The five trends include:
The Mobile Shopping Experience Becomes Faster and Easier
Shopping through mobile devices accelerated by 28% between 2019 and 2021. This is a great sign for hoteliers to develop digital journeys with a focus on the millennial traveler and smart devices.
The ease of making payments through innovative solutions like online payments, ApplePay, GooglePay etc. also makes checkout faster while providing guests the essential health safety needed at this time.
As we learned from the Skift research, changing traveler habits and innovation in fintech is already accelerating the demand for contactless payments. Developing payment strategies around digital solutions has therefore become essential according to Synchrony research.
The Future of Payments Is Invisible
Juniper Research revealed that QR codes are the most popular means of contactless payments in terms of volume, expected to account for an estimated 27% of digital commerce transactions by 2024.
“… more than one-third of consumers who prefer paying with QR codes won’t complete a purchase if that option isn’t available to them.” – PYMNTS and PayPal’s 2021 survey
Synchrony identifies that the next evolution of digital payments is ready to emerge in the form of invisible payments. QR codes have already made their mark in hospitality featuring in some of the most prominent hotels and resorts around the US.
These invisible payments process in the background, secured by vendors, while guests don’t necessarily have to install smartphone apps and sign up to an account. Emerging tech like ApplyPay, VISA contactless, Square and others are already making it easier for travelers to book and pay for their trips, completely online.
Real-Time Payments is Transforming Business Transactions Forever
Synchrony research identifies that real time payments are here to stay, and customers across the world are enjoying them.
The ability to instantly settle hotel and restaurant bills without any clearance processes is a mouthwatering prospect for both parties. For its efficient processing, contactless payments have garnered great support in the US and is set to become the next payment technology trend this year, Synchrony research concludes.
A resounding 130 financial institutions are already integrating real time payment services in their infrastructures. The Federal Reserve on the other hand has also planned a 2023 roll out of a breakthrough real time payment standard.
‘Buy Now, Pay Later’ Is Booming…and Here to Stay
Buying now and paying later is not really a massive feature in hospitality. However, the millennial and Gen-Z demographics are highly influenced by this payment feature.
Larger payments broken down into installments and paid over a certified time period are attractive prospects for the modern traveler. Synchrony identifies this as a top digital payment trend for 2022.
“These new technology trends are becoming useful in a variety of ways for businesses and consumers alike. These installment loans are providing people the ability to pay for smaller ticket goods right away, breaking the payments up into four or more equal payments. It always goes back to providing payment flexibility.”
- Steve Hopwood, SVP, Financial Products, Synchrony.
Biometric Verification Continues to Grow in Influence
Innovation in biometric verification solutions is allowing contactless payments to evolve at a phenomenal rate. The ability to prevent fraud and theft through real time verification is strengthening the entire payment processing supply chain.
The increase in data breaches and card fraud is already popular news in hospitality. Enhancing guest data safety remains a top priority for hoteliers, using leading tech including fingerprint sensors and facial recognition like in smartphones is a brilliant prospect for hotel data security.
Contactless payments are simply becoming the new standard for all businesses, hospitality therefore has to adopt. Hotel operators must now look at payment processing strategies as more than just a screw in the frame.
Touchless & digital payments are slowly becoming the medium of choice for travelers while innovations in fintech has taken payment security and convenience to a completely new level.
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