Six Key Payment Trends for 2015
From security strategies to mobile payment, the payment space is poised for major changes in the year ahead. With huge disruptions in the payment space including EMV and the debut of Apple Pa, 2014 was a watershed year for payments technology. Ingenico summarizes six key payments trends that hospitality tech executives need to know about in 2015.
EMV. EMV stands for Europay MasterCard Visa, the three card brands that originated this standard in Europe many years ago. This payment processing technique relies on chips embedded in cards rather than far less secure magnetic stripes. The U.S. is the last developed country in the world still relying on mag stripe technology, but all of that changes in 2015 as the card brands shift the liability for card fraud to merchants effective in October, unless they change over to the EMV standard.
This liability shift is prompting merchants to upgrade their payments infrastructure prior to October; many have already begun the process, which can take months due to all the testing that’s required. If your property has not yet explored EMV technology, you need to get started ASAP – this will quickly become a must-have as guests concern themselves with credit card security.
NFC. NFC stands for Near Field Communication, and it’s the basis for Apple Pay and other contactless payments methods. NFC and EMV often go hand in hand; in fact, as merchants upgrade for EMV, the vast majority of the time those new systems are also NFC enabled. Contactless is already quite common in Europe and Canada, and we expect by the end of 2015 it will be common in the U.S. as well, so get ready for it – your guests will be asking to pay via this method.
P2PE. P2PE stands for peer-to-peer-encryption, and it’s a security standard that helps protect card data through the payments process. P2PE is becoming standard in the U.S. due to all the much-publicized credit card breaches of 2014 – all of which might have been prevented had the merchants implemented P2PE in their payments networks.
Tokenization. Though many people seem to think Apple invented tokenization (it is used within Apple Pay), the truth is that tokenization has existed for many years. Tokenization is a process in which a customer’s debit or credit card number is replaced with a surrogate value called a token. Issued by a merchant’s payment processor, tokens eliminate the need for merchants to store customer card data in their own systems. Instead, unique tokens are stored and used in place of a card number to process subsequent transactions. Thus, in the event of a merchant data breach, criminals are not able to access actual card data – just encrypted tokens that are meaningless to any entity except the original card processor. Like P2PE, we believe that tokenization will be used by nearly all large merchants by the end of 2015.
Paperless Check-in. While most properties already offer paperless checkout, they still require guests to sign paper registration cards upon check-in. Newer smart payment terminals can help eliminate this step by enabling guests to digitally read and sign registration cards on a 7-inch tablet screen. This improves record keeping, makes the check-in process more efficient and can help properties save thousands of dollars a year on paper.
Mobile Payments. The ability for guests to pay whether they are on property or off is a big trend in hospitality. Mobile POS systems can be used not just for payment but also for mobile check-in, whether that’s curbside, standing in the lobby, on a shuttle or even at the airport. Associates can use mobile payments technology – often a tablet POS system – to check guests in, dip a credit card to keep on file, and sell them an upgrade. These systems can even be used to create RFID contactless room keys for guests, and for pay-at-the-table. Hyatt and Fairmont are among the hotel chains already leveraging this technology.
None of these trends are nascent – they are already present in the hospitality sector, and will be heavily penetrated by the end of the year. All should be in hospitality tech execs’ 2015 plans.
EMV. EMV stands for Europay MasterCard Visa, the three card brands that originated this standard in Europe many years ago. This payment processing technique relies on chips embedded in cards rather than far less secure magnetic stripes. The U.S. is the last developed country in the world still relying on mag stripe technology, but all of that changes in 2015 as the card brands shift the liability for card fraud to merchants effective in October, unless they change over to the EMV standard.
This liability shift is prompting merchants to upgrade their payments infrastructure prior to October; many have already begun the process, which can take months due to all the testing that’s required. If your property has not yet explored EMV technology, you need to get started ASAP – this will quickly become a must-have as guests concern themselves with credit card security.
NFC. NFC stands for Near Field Communication, and it’s the basis for Apple Pay and other contactless payments methods. NFC and EMV often go hand in hand; in fact, as merchants upgrade for EMV, the vast majority of the time those new systems are also NFC enabled. Contactless is already quite common in Europe and Canada, and we expect by the end of 2015 it will be common in the U.S. as well, so get ready for it – your guests will be asking to pay via this method.
P2PE. P2PE stands for peer-to-peer-encryption, and it’s a security standard that helps protect card data through the payments process. P2PE is becoming standard in the U.S. due to all the much-publicized credit card breaches of 2014 – all of which might have been prevented had the merchants implemented P2PE in their payments networks.
Tokenization. Though many people seem to think Apple invented tokenization (it is used within Apple Pay), the truth is that tokenization has existed for many years. Tokenization is a process in which a customer’s debit or credit card number is replaced with a surrogate value called a token. Issued by a merchant’s payment processor, tokens eliminate the need for merchants to store customer card data in their own systems. Instead, unique tokens are stored and used in place of a card number to process subsequent transactions. Thus, in the event of a merchant data breach, criminals are not able to access actual card data – just encrypted tokens that are meaningless to any entity except the original card processor. Like P2PE, we believe that tokenization will be used by nearly all large merchants by the end of 2015.
Paperless Check-in. While most properties already offer paperless checkout, they still require guests to sign paper registration cards upon check-in. Newer smart payment terminals can help eliminate this step by enabling guests to digitally read and sign registration cards on a 7-inch tablet screen. This improves record keeping, makes the check-in process more efficient and can help properties save thousands of dollars a year on paper.
Mobile Payments. The ability for guests to pay whether they are on property or off is a big trend in hospitality. Mobile POS systems can be used not just for payment but also for mobile check-in, whether that’s curbside, standing in the lobby, on a shuttle or even at the airport. Associates can use mobile payments technology – often a tablet POS system – to check guests in, dip a credit card to keep on file, and sell them an upgrade. These systems can even be used to create RFID contactless room keys for guests, and for pay-at-the-table. Hyatt and Fairmont are among the hotel chains already leveraging this technology.
None of these trends are nascent – they are already present in the hospitality sector, and will be heavily penetrated by the end of the year. All should be in hospitality tech execs’ 2015 plans.