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The Rise of Contactless Payment in The Hospitality Industry
Recently, the travel industry has witnessed a rapid shift towards contactless payment.
From airlines and hotels to restaurants and tourist attractions, more travel-related businesses are adopting contactless payment options to provide a seamless and hassle-free payment experience to their customers.
In this article, we will explore why contactless payments are becoming so popular in the travel and hospitality industry.
The global contactless payment market size might reach $18 billion, corresponding to a Compound Growth Rate (CAGR) of 11.7%.
Customer expectations have changed post-COVID-19.
Contactless payment options have become mainstream with the rise of third-party integrators and Fintech companies.
Contactless payments have become so popular that customers refuse to book hotel rooms, resorts, or services if the hotels do not offer an online payment option.
We are entering the next phase of the contactless payment process that will make even third-party aggregators redundant.
Apple has introduced new features in its iPhones that will turn the iPhones into payment terminals.
This feature will enable the users to accept and send payments with the tap of their credit card or another iPhone onto the back of their device.
Why is the Contactless Payment system in the hospitality industry becoming so popular?
Convenience and speed
The convenience and speed of contactless payments are unmatched. Travellers can tap their cards or mobile phones to pay, eliminating the need for cash or entering a PIN.
It is extremely useful in airports and train stations, where travelers are always in a hurry and need to make quick transactions.
Contactless payments also reduce the waiting time at payment terminals, enhancing the overall customer experience.
Contactless payment is particularly handy when travelling in a foreign country. Their language barriers and unfamiliar currency can add to the complexities of payment processing.
Reduced contact and increased hygiene
Post-COVID, travelers are now more aware of the need to reduce physical contact and maintain personal hygiene.
Contactless payments offer increased hygiene and reduce physical contact as people can make payments without cash or touching a payment terminal.
Cashless transactions also help to reduce the spread of infectious diseases and are now a preferred option for most travelers.
Rise of Buy Now Pay Later (BNPL)
Buy Now Pay Later or popularly known as BNPL offers short-term loans to customers to make purchases, usually with zero interest rates.
Due to the popularity of Buy Now Pay Later, the overall usage of credit cards in the USA has lowered significantly.
To avoid paying high credit card interest, more people are opting for BNPL options.
Enhanced security
Contactless payments are immensely popular in the travel industry due to their enhanced security features.
The contactless payment system encrypts credit card information making it difficult for fraudsters to steal any information.
It is especially essential in the travel industry, where travelers are often at risk of theft and fraud.
Contactless payments offer an extra layer of security as they are processed without the need to hand over the credit card or enter a PIN on a payment terminal.
This means that travelers can make payments without worrying about their card details being stolen or compromised.
Integration with mobile devices
Mobile wallets like Apple Pay and Google Pay allow travelers to store their payment information on their smartphones and enable them to make payments with just a tap.
This process eliminates the need to carry multiple cards or cash, making the payments process more convenient and secure.
Mobile payment wallets also allow users to easily keep track of their transactions and monitor their spending, making it easier to manage their finances while on the go.
This feature can be particularly useful for travelers on a budget who can keep a tab on their expenses.
Wide acceptance
Most major airlines, hotels, and travel companies now accept contactless payments, making it easier for travelers to use them for all their travel needs.
This wide acceptance also means that travelers do not need to worry about carrying cash or multiple cards, as contactless payments are accepted everywhere.
Moreover, several small businesses and independent vendors in popular tourist destinations are offering contactless payment options.
This makes it easier for travelers to make payments for smaller purchases like souvenirs, snacks, and beverages.
Overall, contactless payments offer a fast, convenient, secure, and hygienic payment option for travelers in the post-COVID era.
The travel industry has recognized this and is rapidly adopting contactless payment options to provide a better payment experience for travelers.
Contactless payments are environmentally friendly
In addition to their convenience and security features, contactless payments are also environmentally friendly.
Cashless transactions reduce the need for printed receipts and paper invoices. It can help reduce waste and conserve resources.
Travellers can also receive digital receipts for their transactions. It can be easily accessed and stored on their mobile devices, eliminating the need for physical paper receipts.
Contactless payments are cost-effective for businesses
The adoption of contactless payments is not just beneficial for travelers, but also for travel-related businesses.
Contactless payment processing is typically faster and more efficient than traditional payment methods, which can help businesses reduce costs associated with payment processing.
Moreover, cash handling and the associated security measures can be costly and time-consuming for businesses.
By adopting contactless payment methods, businesses can reduce the risks and expenses while handling cash.
Contactless payments offer loyalty and rewards programs
Many contactless payment providers offer loyalty and rewards programs.
This can be a great incentive for travelers to use contactless payments for their travel expenses, as they can earn points, rewards, and discounts for their purchases.
This can help travelers save money on their travel expenses and provide added value to their travel experience.
Contactless payments enable personalized experiences
Contactless payments enable personalized experiences for travelers.
Through contactless payments, travel companies can track and analyze customer spending behavior. It can be used to provide customized recommendations and offers to travelers.
It can enhance the overall customer experience and improve customer loyalty.
Contactless payments are easy to use for international travel
Contactless payments are also an excellent option for international travelers. As they eliminate the need for travelers to carry multiple currencies or navigate unfamiliar payment systems.
Most contactless payment methods are accepted globally. This can simplify the payment process for travelers and make their travel experience more seamless.
Conclusion
In conclusion, contactless payments offer numerous benefits to both travelers and businesses in the travel industry.
From increased convenience and security to enhanced personalization and cost-effectiveness, contactless payments are revolutionizing the way travelers make payments while on the go.
As the travel industry continues to recover and adapt to the post-COVID era, the adoption of contactless payments is likely to continue to grow and become an integral part of the travel experience.
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FAQs
Contactless payments benefit the hospitality industry by:
- Faster Transactions – Reduces wait times at check-ins, restaurants, and bars.
- Enhanced Guest Experience – Provides a seamless and convenient payment method.
- Improved Hygiene – Minimizes physical contact, promoting a safer environment.
- Increased Security – Reduces fraud risks with encrypted transactions.
- Higher Efficiency – Streamlines operations for hotels, restaurants, and travel services.
Yes, contactless payments are secure. They use encryption, tokenization, and dynamic authentication to protect transactions. Since the card or device never leaves the user’s hand, the risk of card skimming or theft is reduced. Additionally, most banks have limits and fraud detection measures in place to prevent unauthorized transactions.
Devices such as smartphones, smartwatches, and contactless-enabled credit or debit cards can be used for contactless payments in hotels, restaurants, and other hospitality venues.
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