What specific payments-related challenges need to be addressed when it comes to systems integration?
When thinking about payments and hospitality, the key to success is integration. While it might be easy to implement partial integrations, such as separate terminals, mutual reconciliations, or other workarounds, we can only achieve real staff engagement when accepting payments doesn’t interfere with their day-to-day work. Thus, it’s crucial to standardize APIs so that integrations to one provider are easy to duplicate. Currently, this is a massive challenge because each integration is completely unique to a single provider.
What do hotels need to understand about the second Payment Services Directive (PSD2)?
In 2020, a new regulation will be introduced in Europe known as Strong Customer Authentication (SCA). This regulation will apply to online payments within the European Economic Area (EEA), where both the cardholder’s bank and the business’ payment provider are in the EEA. SCA is part of the wider EU regulation taking effect, named PSD2.
If a merchant cannot authenticate or exempt a transaction that is in the scope of PSD2, there is a significant risk that issuers will decline the transaction. SCA is authentication based on the use of two or more of the following:
• Knowledge that only the user knows; password, pin, personal info
• Possession that only the user has; phone, token or badge
• Inherence something the user is; face, voice, fingerprint
Overcoming the hurdles surrounding this piece of regulation involve implementing 3D Secure 2 (3DS2). Unfortunately, as hoteliers who experienced 3DS1 can attest, implementing these steps can result in a massive drop in the check-out conversion rate, since it requires additional steps to finalize the transaction. Fortunately, there are a few steps that hoteliers can take to mitigate this issue:
Enable alternative payment methods; GooglePay, ApplePay and Amazon Pay, are all SCA compliant and create a much faster & frictionless checkout experience. Enable guests to store their payment preference. Subscription and/or recurring transactions are considered “merchant-initiated”, and are exempt from PSD2 and SCA as long as the initial transaction and/or card was authenticated. This allows a truly one-click payment experience.
How can hotels bolster direct bookings?
KUGLER: Hotels can leverage solutions that offer a unique guest experience if guests book direct. For example, offer mobile check-in/out as part of the booking process, offer benefits during the stay such as complimentary drink at the bar, an opportunity to customize the stay, or anything that would make the guest feel special. All of this can be managed digitally, and can provide the “WOW” factor needed to bring guests back to direct channels.