The 2020 virus-induced pandemic had halted tourism and the collateral damage was that it took along with it the hospitality sector. Slowly, but surely, people are starting to kickstart their travels. However, during the 2 years of lockdowns, several disruptive changes have occurred and among that the most significant one is the shift in payment preferences among customers.
Merchants too joined the bandwagon with alacrity. What once used to be a completely cash-reliant ecosystem, the hotel industry today is mostly cashless. The ability of hotels to offer a gamut of payment options empowers their business. Such hotels serve guests better and are more likely to retain them than the ones still not ready to digitize their payment processes, or any other process for that matter.
Today, consumers prioritize convenience, and expect value-added services for every penny they spend. Digitized hotel management solutions with integrated online payment options make bookings easier, tracking of availability becomes hassle-free, and refunds or cancellations are prompt. What once used to be a challenging and unpleasant task for not just the consumer, but even hotel management staff is today very efficient and streamlined.
Automating processes will make the entire journey less arduous and a very pleasant experience for a guest. With a proper hotel payment solution in place, all activities are executed with minimum manual intervention, thus eliminating manual errors to zilch.
Changing Payment Trends
Just a decade ago, people paid using credit cards. It was the only option other than cash payments. However, today payments have become modernized. With the advent of Google pay and Apple Pay, things changed for good. These payment technologies allowed consumers to exercise more power while making payments, apart from giving them a better user experience. When more players participated in this digital revolution, a plethora of payment options opened up.
Open Banking
Open banking is a technology that is also a regulatory standard aimed at giving control of consumer data back to the consumer. This ensures greater transparency as well as greater control for a consumer. Using this technology consumers can securely send money between accounts and make authorized payments via a banking application or a website.
In card payments, a card provider is a third-party player. Open banking eliminates all intermediaries. If regular money transfer tasks up to 3 to 5 business days to complete, Open Banking does it in few seconds. This works particularly well for the hospitality sector as there is
-improved checkout conversions, thanks to mobile-first, easy, prompt payments.
– improved acceptance rates. If regular card payments had 5 to 14% failure rates, online payments enjoy a 95% success rate.
– 80% cut on charges as compared to traditional payments
– chargebacks reduced significantly thanks to multiple level customer identity verification and OTP authentication.
BNPL
With Buy Now Pay Later options, customers enjoy a more flexible and short-term financing option without compromising on the purchase. Complete travel packages can be purchased with payments to be made in installments. The biggest advantage of BNPL for the hospitality sector is that it gives financial security to hotels as payment is instantly credited to them while installments will be the headache of the BNPL scheme provider. The next big catch in BNPL is that upselling becomes easy as payment is not abruptly or full-on, consumers can be convinced to buy more expensive packages.
Conclusion…
The conclusion we can draw here is that in a post-covid world, hotels must make a digital adoption as there have been some permeant changes in consumer behavior and ignoring that would be nothing short of suicidal. Today, there are so many solutions that can be tailor-made to best suit each merchant’s requirement.
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