Hospitality: Now Is the Time to Adapt Payment Tech
When the coronavirus pandemic struck the U.S. in March, the hospitality industry braced for short-term pain. Between curbside takeout, PPP loans, and generous unemployment benefits, the industry would muscle through, hoping cabin-feverish Americans would escape to restaurants, bars, and hotels once given the greenlight.
That’s not what happened. Harris Polls conducted throughout the pandemic continue to paint a dire and unpredictable picture of hospitality’s future. An overwhelming majority of Americans remain unwilling to dine at restaurants, attend sports games, vacation, or travel by plane. Come fall, when the weather shuts down outdoor dining throughout much of the country, business may dip even further.
Many business leaders (and certainly the stock market) have pinned their hopes on a vaccine. Yet only 50 percent of Americans are committed to getting the vaccine when it's available. Twenty percent are a hard no.
Waiting for the vaccine or a flattened curve is no longer a reasonable strategy for hospitality businesses. It’s time to transform restaurants, bars, and hotels to meet new global safety norms.
Where to Begin
Hospitality businesses now encourage or even require customers not to pay in cash. Just a few months ago, this would have been unthinkable. But once research emerged that coronavirus could survive for four hours on copper, 24 hours on cardboard, and two to three days on plastic or stainless steel, cash may as well have been nuclear waste. Although the CDC now says COVID-19 mainly spreads between people rather than via contaminated surfaces, the nuance arrived too late and isn’t reassuring enough.
Thus, the entire hospitality business will likely be going contactless, beginning with payments. Soon enough, the image of “money exchanging hands” will be as antiquated as “hanging up” a phone. I’ve dubbed this phenomena Corona-Free Payments.
How to Do It
Corona-Free Payments focuses on eliminating the physical interactions and manual processes associated with payments. This involves examining the customer journey and current business practices to determine which interactions can be converted to contactless or digital.
In April, Mastercard reported a 40 percent year-over-year increase in contactless payments – both tap-to-pay and mobile payments.
- Tap-to-pay relies on Near Field Communication (NFC) technology and involves the guest paying by tapping an NFC reader that’s part of the business’s POS system. This means upgrading to a device that accepts NFC payments or enabling current devices for payments like Apple Pay and Google Pay or with chip-enabled credit cards. This is table stakes for Corona-Free Payments and works well for quick-serve operations where guests visit a self-ordering terminal, cashier, or self-checkout line.
- Mobile Payments and Card Not Present (CNP) applications really allow the hospitality industry to innovate and redefine the guest experience. Unlike contactless payments, these experiences do not require a business to install expensive POS hardware. Instead, they rely on an internet connection and the guest’s mobile device – and can be accessed through the business’s existing website, mobile app, or mobile web. Our partner CardFree, for example, offers guests the ability to both order and pay at the table all through a QR code they scan with their own mobile device. Guests can view and order, split the bill, and pay without ever touching a physical menu or check, or handing over their credit card.
B2B Digital Invoicing
Corona-Free Payments do not apply only to the guest experience – they also extend to the back-office environment. Businesses still receive about half of their invoices in paper form and still pay 43 percent of those by paper check. Digital invoicing plus bank transfer methods like ACH, SEPA, and EFT take B2B payments Corona-Free while keeping fees low. Vendors and suppliers in hospitality will begin to push digital invoices via email, text, or customer portal and expect a digital payment in return. Regardless of infection rates, digital invoicing will accelerate because it delivers cash flow much faster than paper-based invoicing cycles.
The Next Chapter
As Corona-Free Payments go mainstream, hospitality businesses will look for new ways to differentiate themselves. For example, expect some bars and restaurants to do away with ordering from a server. If the phone can handle payments, it can also display the menu and take orders while minimizing the risk of contact between unmasked guests and masked servers.
And look for new technologies that offer not just Corona-Free Payments, but the full Corona-Free Experience. From UV light-based sanitization to automated temperature scanning and social distancing algorithms that determine how to fill a sports stadium safely, it is safe to say that many new innovations are coming soon to hospitality.
About the Author
Ralph Dangelmaier is the CEO of BlueSnap, an All-in-One Payment Platform designed to increase sales and reduce costs for B2B and B2C companies. With more than 30 years of experience in the payments industry, Dangelmaier is at the forefront of ecommerce innovation, using his expert knowledge to grow public and private companies via innovative payment solutions. In addition to landing BlueSnap on Inc.’s annual guide to the 5,000 fastest-growing privately held companies in the U.S., Dangelmaier is a sought-after public speaker, broadcast commentator, and thought leader having published numerous articles in Forbes, PaymentsSource, and more. Dangelmaier also serves on the boards of BlueSnap, MineralTree, Electronic Transaction Association, and Stonehill College. Prior to BlueSnap, Dangelmaier served as the President of ACI Worldwide and is the former CEO of P&H Solutions, the pioneer of web-based cash management. He also has the honor of being named one of the Top 50 Saas CEOs by The SaaS Report as well as a finalist in the Ernst & Young’s Entrepreneur of the Year program.