Status Report: Contactless Payments & Hospitality
Contactless payments are electronic devices that use Radio Frequency Identification (RFID) or near field communication (NFC) Integrated Circuits (IC) on credit cards or mobile devices. Common contactless payments include Apple Pay, Google Pay, Samsung Pay, the Citi Costco Card and wearable devices — all of which enable customers to tap to pay quickly and easily.
Using the same dynamic security as contact EMV cards, contactless payments are one of the most secure ways to pay at the point of sale. Every transaction includes a unique one-time code, ensuring counterfeit cards cannot be created from stolen information. The speed and convenience of contactless payments provides merchants the opportunity to grow sales volume, increase throughput and improve customer loyalty.
In the early 2000s, banks tested mobile payments in the U.S., with payment information hosted in a fob or a sticker on the back of a phone. The first step was to determine if customers would even use this technology.
Over the years, general retailers are increasingly adopting NFC and other contactless technologies. The hospitality industry’s complex payment infrastructure has led to delays in implementing EMV, which in many cases, has been a precursor for launching NFC contactless payments. Among hospitality brands, there is not a universal acceptance of these payment methods, causing an inconsistent payment experience throughout the industry. This conflict often results in a negative customer experience.
Various factors have led to delays of implementation and execution of contactless payments in hospitality. There has been a rising difficulty for hospitality brands to know what the latest technology is and how to prepare for future advancements.
Before a contactless payment system is installed at a property, the hotel needs to look at all effects of the deployment. “Consider guest experience impacts, payment acceptance costs, the possibility of fraud, and if there are any other elements that your property should take into account,” said Jayson Canady, director, global payments strategy, Hyatt.
Dan Sanford, VP, consumer products, Visa, recognizes there needs to be education and awareness among the industry and looks to ease the installation and adoption process, “We are working with merchants and acquirers to increase contactless payments acceptance by making it easier to upgrade their POS infrastructure. While some in the ecosystem believe the process for upgrading is complex and time intensive, we have worked to reduce testing and certification of EMV contactless hardware and software from up to 12 months to four weeks on average.”
Contactless payments reduce the transaction time for a guest down to seconds, and most of the time, simplify the payment action. Sanford said, “Particularly for industries such as hospitality, merchants are looking to increase the speed of service and operational efficiency while delivering a simple and secure consumer experience.”
Canady said, “We’re moving to a motto where we want to enhance the guest experience, reduce the instances of required human touch, where it makes sense, and really provide customers with options as to how they interact with us.”
Education and awareness are needed to drive adoption of contactless payments in the U.S. The payments and hospitality industries can work together to standardize branding, train hospitality staff and offer marketing materials to inform customers of the accepted forms of payment.
“For the hospitality industry to successfully deploy contactless payments and other digital payment methods, they must adapt a mindset that we see tech companies taking,” said Canady. “Push out earlier iterations of a product and start with that to determine what to do next.”
HTNG has chartered the NFC Contactless Payments Workgroup to explain the value of going contactless to improve and deliver a seamless customer experience. This workgroup is led by Chairs Michael Chall, senior director, strategic technology partnerships, Visa and Ryan Ahern, payments solutions manager, Ingenico Group.