The future is (mostly) cashless
For global hoteliers, payments is a constant issue. With guests coming from all over the world, it's essential to take whichever payment they feel most comfortable with. When guests can make seamless payments using methods they trust, they tend to spend more and be more satisfied with their experience. These types of payment experiences are typified by the likes of Disney Magic Band and other efforts to reduce the friction to pay.
For Americans, the preferred payment method could soon be mobile. This is good news for hoteliers, as on-property payments aren’t usually pre-paid. Guests tote mobile devices, and are using hotel apps to unlock doors, making for an excellent opportunity for mobile payments.
The trend towards mobile payments is rapidly increasing. Within three years, per the Economist, consumers will make triple the payments on mobile than they did in 2016. This will bring the figure to $282 billion in mobile payments by 2021.
The growth of US mobile payments, from Payments Industry Intelligence.
This is a trend that reinforces itself as more consumers become comfortable with the security and speed of mobile payments. As the mainstream adopts the technology, and increases usage, it’s up to businesses to determine how to integrate a mobile payments strategy into daily operations.
Mobile payments in hospitality
Most hospitality brands have significant food and beverage operations. The venerable room charge doesn't always apply, as not everyone who walks into a hotel restaurant is a guest. There are also massive implications for hotel brands that manage significant ancillary spend, such as casinos.
When legendary restaurateur Danny Meyer shared his decision to go completely cashless across his 18 concepts, not all comments were positive. Many commenters want the ability to pay in cash. Meyer pushed back, saying that there’s no requirement for cash to be a payment method:
"We’re unaware of any federal law that requires private businesses to accept it, and with the growing ubiquity of plastic and mobile payment, many businesses are choosing to eliminate cash from their operation entirely."
Meyer points to safety, efficiency, and speed for the reasons behind going cashless. These are three pillars of many hospitality operations, which focus on not just serving guests well but doing it safely and efficiently. In today’s fast-paced world, guests appreciate any added efficiencies related to payments. Just think about the last time you purchased something on an airplane - no cash, making it safer and quicker for flight crew.
Yet, cash continues to be popular across the globe: in the UK, around 2.2 million customers mainly used cash for their day-to-day shopping in 2017. In the US, 30% of payments were made with cash. In Sweden, consumers paid in cash 15% of the time.
Meyer recognizes this small-but-significant amount of cash payments, and says that hospitality wins out no matter what the policy is:
“Policies can be broken in the name of hospitality, and if someone wants to enjoy our food and drink, yet is only able to pay with cash, it is unlikely that we would turn them away.”
Consumer sentiment towards choice in payments is clear. Cash will continue to be used by a small-but-vocal minority. Contactless payments will continue to be a preferred payment method worldwide, as it’s much easier to deal with mobile payments and eliminate cash for both consumers and businesses.
Case in point is China’s rapid adoption of digital payment systems. With the likes of WeChat Pay and Alipay extending their reach outside of China, the imperative is ever-more urgent for hoteliers to adopt a comprehensive payment strategy.
Every hospitality operation should have a plan to accept mobile payments. Whether that includes phasing out cash is another story entirely! Each guest is different, and the decision lies with your guest mix. Consider country of origin and audit payment expectations first -- and then everything flows from there!