Keys to the new payment methods in the hospitality industry
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Consumer expectations tend to be higher when they are enjoying their free time. The last two years have caused that, after the efforts to stay open, restaurants and hotels have a much more demanding clientele and that the sector has to renew its proposal of payment methods to adapt to the needs of the market.
For this reason, at Adyen we analyze the key elements that condition the transformation and digitization of the hospitality sector within the Spanish industry to understand the direction and transformation of payments.
Deferred payment to attract new customers
our last Adyen Report on Payment Methods 2022 revealed that only 33% of restaurants offer deferred payment alternatives in Spain, an option that is increasingly in demand. At the same time, it is beginning to be observed how reservations with deferred payment in vacation hotels are becoming one more option for consumers. In fact, half of the hotels in our country already allow to pay the stay deferred (50%) in order to reach a greater number of customers. The number of people who opt for this alternative in Spain is specifically 33%. By analyzing this payment method by sectors, we can identify that where it is most used is in appliances (24%), electronics (19%) and travel (15%).
In turn, the Adyen Retail Report 2021 showed how to 24% of users would like restaurants to use technology to enhance their experience, for example by implementing self-service kiosks or pay-at-the-table technology. However, for this it is necessary to adopt more advanced technology to lead the change and have a greater competitive capacity.
Tokenization, greater flexibility when paying
Although Spain is one of the most advanced countries in terms of digitization, it is not so advanced in terms of payments due to regulations. Despite the fact that hotels know that they cannot ask for card data by phone or take them physically, these behaviors continue to be carried out. Despite the fact that the pandemic has caused many sectors to go digital in payment experiences and adopt new habits, such as having a QR code instead of a printed menu, or allowing payment through e-wallets to reduce contact physical, much remains to be done.
Keys of the Spanish hotel industry before the transformation of the new payment methods
For this, tokenization is essential, which favors the reduction of exposure of sensitive card data. How does it work? A hotel’s guest card details are captured during their online booking, or at check-in, and data is encrypted and replaced with a secure token. This token can be used for all subsequent purchases. In fact, you can free guests of their cards for the entire experience.
Thanks to the token, it is possible to activate any device that has an NFC tag (be it a wearable, an access card or a room key) and the guest can use it to pay. This makes it easy to purchase hotel extras like booking spa treatments, for example, without having to present a card, enter a code or sign an invoice.
Personalization and loyalty, the best allies of profitability
In the Adyen Payment Methods Report 2022 we found that virtually 70% of respondents They consider that companies should offer incentives through their payment method to retain them as users. Also, 23% of respondents said they wouldn’t mind if their favorite merchant remembered their payment method in order to benefit from discounts or loyalty benefits.
Within the sector, hotels and restaurants can reward the most loyal consumers through payment methods. Some of the main advantages are that more traditional loyalty formats are dispensed with, such as stamping bonuses, which can be archaic, and thus the user is not forced to download unnecessary applications that slow down or hinder the entire purchase process.
In turn, in this way it is possible to capture extremely valuable information for the hotel or restaurant, offering the possibility of having full knowledge about its clientele.
This user identification allows companies to know which buyers are more loyal, for example. Adyen does not provide the consumer’s card details, but an identifier assigned to a specific alias. In this way, companies do not need to create loyalty programs to use, but they can know the number of purchases of a specific person throughout their network to be able to offer rewards or discounts.
Security tools to perfect the final experience
Adyen manages authentication through solutions like 3DS2, creating better experiences and reducing fraud. Consumers take a simple step in the checkout process to allow the issuing bank to verify that they are who they say they are or, in some cases, bypass authentication due to exceptions set forth.
The level of fraud depends on many factors, such as the country in which it is sold, the amount and type of product sold, or the level of data that is shared with the payment provider. The payment methods used and the way to manage them are essential to reaffirm the security of a business and that the consumer can buy with total security, regardless of their origin.
In short, the offer of various purchasing methods is a reality for the user and for the market in general. We are heading towards a more digital, more agile system, and, ultimately, more customizable based on the multiple payment options that each user demands. For this reason, the Spanish hospitality industry has adopted innovation and technology in its transformation to be able to offer, as one in three companies of them currently assures, all the payment options that their customers wish to use in such a globalized, uncertain world. and changeable as the one that is presented.
Author: Juan José Llorente – Country Manager of Adyen in Spain and Portugal