“With an advanced pay-by-link service supporting both card and instant account-to-account bank payments, hotels can easily bring their checkout to wherever is most convenient for their guests – via SMS, WhatsApp, email, or web chat,” writes Donal McGuinness, CEO of Prommt
The hospitality industry has certainly been put to the test in recent years, and, as they say, necessity is the mother of invention. During the pandemic, hoteliers had no choice but to pause, reflect, and reinvent themselves. Outdated tech infrastructures were no longer cutting it, and businesses had to invest in digital transformation to design seamless guest experiences, streamline payment processes, and unlock new consumer insights. One of the most exciting things to come out of this period of upheaval was the surge in remote payments innovation.
Consumer adoption of technology took a huge leap during the COVID-19 pandemic. Guests now have higher expectations on speed, convenience, personalisation, and payment flexibility. There is no going back now. When it comes to payments, greater choice leads to greater satisfaction as 56 percent of consumers like to have a selection of payment methods at checkout. The popularity of contactless, cardless, digital wallets, QR codes, and biometric payments has accelerated, and guests demand a hassle-free booking experience and expect hotels to accommodate their preferred payment method or risk losing out on business. 71 percent of travel and hospitality businesses who connected their payment systems say unified commerce increased sales by at least 20 percent in 2022. The need to incorporate new methods of effective payment collection that frictionlessly merge physical and digital touchpoints, and reduce payments settlement time, is more vital than ever.
However, many hotels still process guest payments over the phone. This legacy practice carries risks of non-compliance with data regulations and card scheme rules, high card-processing fees, and payment operations costs. It is also very vulnerable to fraud and chargebacks, and last but not least, is a really poor guest experience. Try to show me anyone who likes giving a stranger their credit card details over the phone. They don’t exist.
Real-time payments facilitated through open banking can help hoteliers reduce costs, protect margins, and meet rising guest expectations. With an advanced pay-by-link service supporting both card and instant account-to-account bank payments, hotels can easily bring their checkout to wherever is most convenient for their guests – via SMS, WhatsApp, email, or web chat.
The adoption of open banking payments could reduce transactional fraud by up to 61 percent by 2024, and it is quickly becoming a winning alternative to traditional payment methods due to strong regulatory support from governing bodies, penetration of mobile banking, elimination of high card processing fees and chargebacks, faster payments settlement, and, most importantly, accelerated customer adoption. Guests are brought to a pre-populated payment flow enabling them to pay from the comfort of their mobile device and the familiarity of their online banking app for authentication. The need to enter lengthy banking IBANs or set up new payees within digital banking platforms is gone. They enjoy greater control over how their financial data is used and who can access it. Studies indicate that approximately 70 percent of guests would feel comfortable paying for their hotel room through open banking, and the value of global open banking payment transactions will exceed $330 billion USD by 2027, up from $57 billion USD in 2023.
Open banking is bringing greater security, speed, and personalisation to guest payments across all areas of hospitality. Whether it’s reservations, meetings and events, food and beverage, or spa – hotels can protect their bottom line, reduce operational overhead and meet evolving consumer expectations head-on. Cards are still critically important, but offering guests choice is the key, especially where the transaction value is high. By becoming more digital-optimised, unified, and collaborative across all of their guest interactions, hoteliers are able to lay the groundwork to drive profitability and customer loyalty.
About the author
Serial entrepreneur Donal McGuinness is CEO of Prommt. He studied Computer Science at DCU and Telecommunications Engineering at DIT and spent the early years of his career in the telecommunications industry. His experience in mobile payments dates to 1999 when he founded his first mobile payments company, ItsMobile. Donal was also a Non-Executive Director of the Irish Internet Association from 2009 to 2011 and a movie distribution business from 2002 to 2020.
In 2016 Donal joined a silicon valley startup in the identity verification space called Danal inc, where he set up and grew the global business outside of the USA as General Manager of EMEA until 2019 when the business was acquired by Boku Inc for $112 million USD. Donal joined Prommt as CEO in 2019. He is an innovator and is passionate about payment innovation.
