Online payments are taking every industry by storm. Banking, Education, eCommerce, Healthcare, Food and Beverages, every sector is leveraging the benefits of online payments. The hospitality sector too is no different. In the hospitality industry, online payment solutions give a different level of convenience to the customers.
It will make their experience seamless and as frictionless as possible and help hotels to derive greater revenue from more bookings. The hotel industry online payment processing is gaining momentum globally. Countries that lead the way in this regard are Belgium, France, Canada, and the UK with 93%, 92%, 90% and 89% respectively. It can be noted that European countries are far ahead than Asian and American counterparts. However, Asian countries are catching up faster with South Korea and China shifting to cashless society.
It is expected that several of these countries will be entirely cashless by the end of 2023. There is a substantial spike in contactless payments, mobile payments, peer-to-peer payments, etc. So, how can Hotels keep up with such global payment preferences shift to satisfy guests and drive revenue? And what are the best practices to ensure that online payments are secure and fraudulent activities are kept at bay?
Let’s discuss in detail-
- What are the major challenges in hotel payments?
- The best practices for secure payments
- Best Online Payment Solution for Hospitality Sector
Hotel Payment-related Challenges
Data Security Concerns
The hospitality industry is a card-reliant industry, making it more vulnerable to online frauds and data breaches. With hackers actively prowling on the internet, most online transactions are vulnerable. Additionally, tackling dishonest clients who work with online fraudsters will be quite a challenge.
Meeting changing Guest Expectations
Unfortunately, hotels often suffer great setbacks when it comes to guest experience with website malfunctions, manual availability tracking, rigid check-ins and check-outs, last minute cancellations, messy refunds and unpleasant chargebacks and what not. For today’s guests, convenience is paramount and may not be all ears for myriad excuses.
With social media activism on the rise, one angry customer can cause irrevocable reputational damage. Hotels have much to lose and even end up with low conversions and failing business. The payment process is another area prone to create hassles. If your hotel doesn’t offer the gamut of payment modes that your competitors offer that is reason enough to cause much dislike among guests.
Now add to this the lack of international payment acceptance, no multi-currency support and there is no reason why your guests should abandon you and choose your competitor.
Heavy Reliance on Card Payments
Despite the overwhelming increase in digital payments, the hospitality sector is heavily card reliant. Sensitive card details are stored at the time of booking and final payment is also often made via card. There is a significant time gap between booking and actual use of service. Last-minute cancellations, refunds, chargebacks further complicate matters.
Apart from this, unethical hackers and fraudsters intercept Pos systems with malware and card details are breached. According to a report published in 2017, more than 95% of all high-profile hotel data breaches were by malware attacks on POS systems.
A number of regulations like PCI, PSD2, SCA, 3DS, etc exist that every online payment solution must be compliant with. It will be a challenge for independent hoteliers to deal with such complexities when they are already harried with limited staff and resources.
Best Practices for Secure Payments
On the one hand, guests want the convenience of online payments, on the other side the security threat posed by fraudsters. What are the best practices to keep hotel online payments system safe and secure ?
Let’s dive straight in
Secure Socket Layer or SSL and Transport Layer Security or TLS are all used to encrypt data. You can ensure greater data security by adhering to these protocols while conducting online transactions. These protocols ensure that all sensitive data is encrypted and can be accessed only by the authorized recipient.
IP and Billing address Verification
Verifying the details offered during a transaction can help in flagging fraudulent activities and data breaches can be averted quickly. AVS or Address Verification Services can be employed to verify the IP address of the buyer and the billing address of the credit card. This can ensure that the customer is the cardholder.
Payment tokenization is a process of generating a token or a string of random numbers in the place of sensitive card details and this token is sent across the payment networks to complete the transaction.
Ensure stronger passwords
Generally, people use different combinations of their name as a password. Hackers can easily access weak passwords by various permutations and combinations to breach security. Requesting your guests to use stronger, difficult-to-crack passwords with a mix and match of characters can be a great way to stop data breaches. However, such passwords will be hard to memorize, so always enable a “Forgot your Password” process to help clients in case the need arises.
Deploy 3D Secure
3D secure authentication is paramount for any online transactions to eliminate unauthorized transactions, and to protect merchants from chargebacks. It must be remembered here that merchants, card providers, and financial institutions share relevant information to allow a transaction. Hence, the onus to facilitate safe transactions is shared by all parties involved.
Card Verification Value or CVV is often used to validate a “cardless” transaction either via a mobile phone or online. The process is devoid of card swiping on a PoS machine. In the event of a credit card numbers being stolen, CVV request will ensure that the transaction will be aborted as only the cardholder will have access to the CVV number.
SCA enabled transactions
Another effective method to eliminate frauds and enhance security while conducting online payments is to ensure Strong Customer Authentication. A PIN or password, or voice recognition and fingerprints, any other biometric recognition tools can be used.
Real-time fraud monitoring
Continuous and tireless fraud monitoring is essential to detect and parry fraudulent activities. Enterprises and hotels can establish rules that can be used to limit, allow, or reject a transaction depending on its risk tolerance factors or even request for a manual approval in case of a suspicious activity.
Merchants that deal with transmitting, processing, or storing credit card information are required to be PCI compliant. A non-compliant business will have to face serious repercussions in case of a data breach including hefty fines and other penalties that can be detrimental to organizational reputation. One such piece of news will lead to losing the customer’s trust, which will be very hard to regain.
Training staff can be costly and time-consuming but that effort is worth every penny and every second because an experienced staff will be able to realize a potential fraud, and respond appropriately.
Employing these best practices of secure online payment process can go a long way in building a long-standing and trustworthy customer relationship.
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