Is your hotel ready for mobile payments?

In the past few years, mobile payments using Near Field Communication technology have been gaining ground, first on phones and now on smart watches. Since mobile payments are used in the retail market already, what do our hotel guests have to say about mobile payments in hotels? Do they use mobile payments now? Will they use mobile payment methods to settle hotel bills? What about buying that cup of coffee at the coffee bar or the souvenir T-shirt at the gift shop?
 
To see how much traction this new payment method is gaining within the hotel environment, HFTP partnered with Agnes DeFranco, a distinguished chair and professor at the Conrad N. Hilton College of Hotel & Restaurant Management, University of Houston, and Cristian Morosan, an assistant professor at the university. For the report, 794 U.S. hotel guests were surveyed in a wide range of demographics (gender, age and income).
 
The first part of the study revealed mobile device use. More than 700 of the respondents reported that they carried at least one device with them at their hotel stay, with 67 percent carrying one device, 28 percent with two devices, 4 percent with three, and 1 percent with four devices. From those who said they carried only one device, the phone was the primary mobile device. For those who carried two, the top combo was a phone and a tablet.

With all the different options of payments, from credit cards to debit cards and now, NFC, respondents were also asked their preferences among these methods used in hotels. Given 12 payment options, credit cards with magnetic stripe received the highest average rating, followed very closely by credit cards with chip and signature and credit cards with chip and pin. Online payment via mobile phone/tablet and NFC mobile payment came in at eight and nine on the list.
 
While use of mobile and NFC is not widely adopted yet, it is hard to ignore that this method will grow in use as we turn to our mobile devices for more of our day-to-day transactions. So the survey participants were asked their perceptions on such technologies. When asked what they would find useful about using such payment methods, the top-rated items were: reduction of payment methods that need to be carried, better view of purchasing history and faster access to reservation information.

If you are a hotelier and still think mobile phone payment or NFC are just flash fads, think twice. As with any new technology, on the merchant side, it is always a question of infrastructure: How much it will cost your hotel(s) to install this technology, train your employees and know how to do the correct reporting so you can service guests. However, with the new payment terminals that hotels and merchants need to invest for the Europay, MasterCard, and Visa standards, you are halfway there.

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Now, what about your guests?  With many individuals upgrading their smartphones whenever a new model is on the market, and with smart watches and tablets, more and more guests are equipped with the proper devices.
 
There are a few points of which hoteliers need to be mindful.  First, it is never a waste of your resources to educate guests of your new offers and capabilities. While many hotels are using e-commerce and m-commerce already with their guests, MPP and NFC is just another step.  Incorporate this new technology in your communication to your guests.
 
Also, if you are still thinking about implementing, you may choose to start small by just introducing NFC payment in certain areas of a hotel instead of totaling diving in head first. Institute a pilot test and offer NFC to guests who are more prone and ready to use NFC, such as business travelers and young travelers.

The consumer market is ready.  Just as years ago when guests had Internet at home and they then demanded reliable broadband wireless connections at hotels, MPP and NFC are the next stage.  Retailers are using it already.  As more users are comfortable with NFC, they will want to use it more.  So, should hotels lead or lag?  There is only one choice: lead.

Visit the Resources section of the HFTP web site (www.hftp.org) for a copy of the full report. For more information, contact [email protected]

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