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An In-Depth Look at Digital Payment Options During HITEC 2023

During this educational session, representatives from Adyen, Sage Hospitality and Hilton spoke on the surge in popularity of digital payment technology and what that could mean for hoteliers in the near future.

As digital payment options grow in popularity (think Apple Pay, Google Pay, WeChat Pay, Alipay, etc.), some hoteliers are wondering if it may be time to begin accepting payment from these new providers. And if hoteliers decide to accept payment, what are some of the implications when it comes to payment security and processing fees? To help answer these questions, three industry experts spoke on stage at HITEC 2023: Amanda Huyck, Global Hospitality Strategy, Adyen, Jeffrey Parker, CHTP, VP Property Technology, Sage Hospitality Group, and Joshua Tong, Chief Information and Digital Officer, Asia Pacific, Hilton. Here is a brief overview of some of the topics they covered. 

The Rise of Digital Payments

According to Tong, there are a few reasons why digital payment technology has become more popular among consumers and merchants. For example, consumers are wondering why they need to carry a wallet and a phone - when they could just carry their phone. Huyck agreed noting that people - from every generation - are interested in speed, security and convenience and that’s exactly what digital payment technology offers. This technology isn’t limited to just younger digital savvy generations, she explained, noting that 7 percent of people who are aged 75 and older in North America are engaged with a digital wallet.

Merchants, on the other hand, are wondering why they need to rent a POS terminal when they can just print a QR code and receive payments without needing to pay that rental fee, Tong added. Similarly, the commission rates to use a QR code are significantly lower (0.5% to 0.9%) than the transaction rates charged by credit card companies (1.5 to 3.5%). 

Appealing to International Travelers 

Parker noted that the United States sees about 300 million travelers yearly from China alone and asked how hotels can make their payment process more appealing to this large demographic. 

“Start thinking about how to make the process frictionless for these guests,” Tong said. 

That being said, Tong acknowledged that it might take time and money to integrate a variety of payment methods into the hotel’s tech stack - but it is worthwhile. And for those hoteliers who are interested in a faster turnaround, Tong recommended posting signage at the front desk near a QR code showing that your property accepts a variety of international payment methods.

“Letting people know you accept these payment methods is so important,” Huyck said. “Advertise it everywhere! Make sure you get credit for the infrastructure work that you’ve done and encourage your international guests to use it. Otherwise you might end up questioning the ROI.” 

How to Determine which Mobile Payment Methods Are Right for Your Brand

Hoteliers don’t want to just jump blindly into accepting digital payments, Huyck warned attendees. Instead they really want to make an informed decision that takes into account who visits their hotels, how those guests prefer to pay, and what payment preferences that demographic will have in the next 1 to 5 years.

“Do some digging into your data,” she added. “You might be surprised at what you find.” 

Tong agreed, noting that Hilton has data warehouses that it uses to learn the source markets for its hotels. For example, it knows that its Hawaii properties will always have U.S., Chinese and Japanese travelers. Hilton also takes into account whether their property is a luxury hotel, midscale or economy, as that will affect who typically visits the property. And Hilton keeps in mind that guest profiles will change based on the time of the year, the seasons, typical holidays and vacation schedules, etc.

Payment Processing Fees

During the Q&A section of this educational session, one hotelier asked how alternative payments might help reduce or eliminate either the processing fees or the POS hardware rental/purchase fees.

“I think most modern payment technology solution providers are completely on board with moving beyond terminals and really streamlining the experience for the front desk agent or whomever has to interact with the point of sale,” Huyck replied. “But accepting alternative payment methods, which are lower cost than traditional credit card processing fees, is something hoteliers can pursue if they’re looking to lower the cost of credit sale payments.”

While Tong agreed, he also pointed out that hoteliers need to consider the convenience factor and how many of a hotel’s guests would be willing to pay using digital payment methods. And while Hilton is certainly interested in accepting digital payment methods such as Alipay and WeChat Pay, especially in Asia, it’s still “waiting for the right time for some of these payment methods to mature” in other markets before doing a full scale rollout.

As a follow up to that comment, Parker asked Tong and Huyck if they thought that the lower cost of digital payments might put pressure on higher cost payment solutions to reduce their prices.

According to Tong, it’s a big fat ‘Maybe.’ Credit card companies are not “standing still” as this competition arises, they’re working hard to become as integrated with digital payment products as possible. And they’re financial institutions that the world literally backs. But digital payment methods are continuing to innovate and pressure is building in countries, such as China, which could possibly lead to some change.

Digital Payment Scams

Another question raised by an audience member had to do with the hotel’s responsibility around digital payment scams.

“What if someone puts a fake QR code in a guestroom or at the front desk and the consumer ends up paying a scammer instead of the hotel?”

According to Tong, unfortunately “fraud happens.” It can happen on credit cards and it can happen with digital payment technology. When a fake QR code is put up over a genuine one, it really falls on the hotelier to have been more vigilant.

“It’s incumbent on the the merchant to make sure the correct QR code is displayed and to take the same amount of vigilance that one would with any other type of payment: cash, credit, etc.,” he added.

But when it comes to the actual security of the payment transaction, Huyck noted that, in general, payment technologies are becoming more secure and not less. 

“Technology companies are putting more checks and balances in place,” she said.

However, this doesn’t mean that hoteliers can just take payment security for granted. Tong noted that these payment providers need to be using high quality encryption standards, meeting all the legal requirements for PCI, SOC Type 2, and/or ISO 2001. 

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