Fintechs have experienced significant development over the last five years. Some smart technologies are emerging with obvious potential for the hospitality industry such as making booking reservations and payments, often linked to management systems of access to rooms and services. The pandemic has accelerated the implementation of these innovations.
Dr Albian Albrahimi, Lecturer in Finance, Les Roches, shares his thoughts on how fintechs are supporting the hospitality sector.
The field of hospitality was transformed by Covid. The lockdowns prompted customers to purchase online, while health reasons were driving the adoption of frictionless payments and other connected apps for check-in without contact at the reception desk. Traditional face-to-face sales or cash payments in hotels and restaurants vanished in favour of credit cards. But it had also promoted the rise of E-wallets – mobile wallets – like Apple Pay, Alipay, Moneo in France, Clearpay in UK, Twint in Switzerland, or M-Pensa in Kenya.
However, when it comes to payments with existing systems in hotel management, there are several issues especially for the booking process: global acceptance of various wallets, client no-show despite a reservation, mistakes with credit card information (5% of transactions), fraud to stolen credit cards, even sometimes malicious customers claim they didn’t stay in the hotel and ask for a refund from their credit card. Therefore, a bunch of companies from the fintech side are helping to solve those issues. One is called ECOMMPAY, they are in partnership with the chain Accor hotels.
They provide a platform where the customer has his credit card data registered and verified. Then, the client has to approve each transaction using the 3D payment security system. Like when you pay at Uber, you just give your credentials. No matter where the customer makes his reservations those systems have to be global. At checkout, the client gets a summary of everything that was consumed and then can pay directly. Everything is paperless. For the reception, it is a virtual terminal. For the booking desk it is a proof of an existing transaction even if the client does not show up. With new apps, you can also open the doors with mobile phones or have menus printed out in hotels.
Client acceptance of these solutions is not a matter of technology, it is about the client experience, reinventing processes. Most of the time, if the client understands the benefits, he will subscribe to the innovation. And this even though the system analyses the customer’s behaviour, which is no different to tracking the client through a loyalty program. Among rewards, the client is aware that he can get the advantages of personalised service on his/her preferences. Knowing the customers helps a lot in terms of analysing their needs, what they like and their dislikes, and this can be then translated into a way to perform better.
The cost of those solutions is presently too high for individual independent hotels, but over time technology becomes cheaper and it could also be adopted. Note that it is not bad to let the big players test these fintech companies until they mature and then once everything is proven that it works properly. It is also the case with blockchain. Though lots of expectations are behind blockchain, at this moment, we lack
easy-to-implement applications for hospitality.
Of course, in the future, blockchain will be able to connect different platforms because it’s more secure, it’s faster and it’s also peer-to-peer oriented; applying the technologies for verifying transactions, and simplifying transactions for direct reservations without the middle booker. It is like the payment by token, it will take hold the day the crypto money is stable and less volatile. In everyday business life, innovation is mostly a process of incremental change.