Cash or cashless? This is a really essential thought!
Seldom you might have come across this question, “Do you accept a card?” Well, it is mostly asked when your guest wants to make a cashless payment at your hotel.
And if your answer to this question is NO; then let me tell you, my friend, you are surely behind the curve in this digital world.
But, if you reply with a pleasing YES; your hotel has a sureshot green tick on your guest’s mind.
Having global acceptance, online transactions are the easiest and fastest growing mode of payment.
They are payments made with a real-time gross settlement; driving people to carry more plastic money (cards) in their wallets than having physical cash.
While, cashless payments in hotels are being preferred significantly, however some still strive to adopt them at their properties.
On that note, in this blog, I have gathered all information on how you can adopt cashless payments in your hotel and the various ways through which you can accept them.
Table of contents
Let’s begin with,
What are cashless payments?
Remember those days when we recorded our expenses and incomes in files? And, we had huge drawers and lockers to keep the cash secure?
However, this situation has changed completely now. Bills and cash are rapidly becoming a distant memory, as the world moves into the cashless era.
Right from purchasing a carton of milk to a new car – everything is being paid digitally; with its information stored on your smartphones.
To be precise, cashless payments have swept everything into a new world of digital transactions.
So what are they?
Basically, cashless payments are made by transferring electronic money typically through a bank transfer or a card; without the need for physical cash.
They are the simplest, fastest, and safest way to carry money on your fingertips anywhere in and around the world.
Let’s find out,
Why are cashless payments a must in the new normal?
With the COVID19 pandemic attacking the globe; going cashless is no longer an option, but rather a necessity for all types of businesses.
In the hospitality industry, it has enforced the revolution of contactless services and digital payments; further boosting the pay@hotel option gradually.
Mainly because of the simplified transaction procedure and refund policy that it provides to your guests.
Let me highlight you a few,
Key benefits of cashless payments in hotels:
Convenient to guests: Naturally, guests don’t need to carry physical money while traveling to make payments. Either they pay while booking through any medium (OTA, booking engine, etc) or they pay directly at your property. This is convenient for them and even enables quicker transactions.
Reduces human errors: Electronic payment transactions are easier to record and track, yet safe from thefts. On top of that, managers no longer need to register this influx diligently against the receipts; thereby leaving no space for manual errors.
Enables paperless and contact free payments: The new normal to go contactless is one of the most favored reasons to adopt cashless payments. Besides, it helps hoteliers serve more customers in less time thereby enhancing the hotel’s revenue.
Allows proper collection of customer data: Cashless payments record every transaction that is made, providing you essential data on who buys what and when. This gives you an opportunity to understand your customers better and offer them services based on their preferences.
Eliminates the risks of keeping cash: Handling cash has a lot of risks involved. It can get stolen, damaged during disasters, accidentally hand over extra change, and suchlike. With a cashless system, managing your money becomes quite simple.
Loyal customers and bookings: Receiving prepaid reservations ensures you that the booking is valid and has lower chances of no show or cancellation. This helps you maintain optimum occupancy at your property and thereby boost your business revenue.
To sum up, going cashless can surely be a boon to your hospitality business owing to negligible risks involved, ease of use, and higher guest satisfaction.
Since you are well versed with the benefits, let me shower some insights on,
Why are cash payments not recommended now?
Technology is changing every single day. If we look back, cash payments were the most and quite frankly, the only source of money people relied upon.
To state the truth, online payments did take some time to claw their way inside the ecosystem. But now that they’re in, they’re going to stay here for good.
Those who never made online transactions are now keen on making cashless payments (even my Dad, who used to be skeptical with such methods now prefers Paytm and Google Pay over cash exchange).
To mention, cash payments are not preferred because:
- Transactions are often lengthy
- Deliver slower services
- Possibility of fake notes or dirty money
- Constant need to maintain change
Not to mention, currently, the hand-to-hand exchange of cash is considered risky. So, hotels need to prioritize their guests’ needs now and adopt a no-cash policy.
To start with this, let me guide you on the various ways to accept cashless payments at your hotel.
How can you offer cashless payments at your hotel?
There are numerous ways to go cashless. In fact, with every new guest entering your premises; you’ll find a unique payment method they prefer.
Though, here I am covering some of the best and most preferred payment methods to help your hotel business pilot it’s way into a cash-free world.
1. Debit and Credit Cards
Banking cards offer your guests more security, convenience, and control than any other payment method.
I’m sure the amount of debit and credit card holders across the world is almost equal or even more to our overall population.
In the Q1 of 2020, there were around 1141 million VISA credit cards issued across the world.
Source
Whereas, in Q4 of 2020, there were around 2.33 billion VISA debit cards issued globally.
Source
These cards allow your guests to transact money directly from their bank account and pay for your services within a fraction of seconds; saving equal time and effort behind collecting such payments for you and your guests.
Some examples of card payment systems are: RuPay, Visa, and MasterCard.
Note: You might need a credit card server integration or a POS system to swipe cards for payments.
2. Net banking
Net (internet) banking is an alternative to a debit or credit card. Here your guests need to login to their net banking account to approve a payment.
Net banking gives your guests the flexibility of transacting even if they have misplaced their debit card or credit card, or for those who don’t prefer to carry cards everywhere.
Through internet banking, they can make utility payments, purchase goods and services online, or send and receive money.
It is an electronic payment system that enables your customers to conduct a range of financial transactions.
These are services that enable real-time transactions for your guests to make any cashless payments at your property.
Some examples of internet banking are: IMPS, NEFT, and RTGS.
3. UPI
UPI stands for Unified Payment Interface. It is an immediate and 24×7 functioning payment system that helps you transfer funds between any two bank accounts through a mobile platform.
The only thing that you require is, to have an account with a bank that provides a UPI App for Android, Windows, and iOS mobile platform(s).
Once done, make sure to register your mobile number with the respective bank and link it to the UPI account.
With this, you can receive cashless payments at your property on-the-go in just a matter of a click.
Working in real-time, this mobile payment method has recently been most prevalent in India to facilitate inter-bank transactions without having to deal with any transaction fee.
Some examples of UPI are: BHIM, PhonePe, and Google Pay.
4. e-Wallets
An e-Wallet is a digital wallet that users can carry anywhere. It poses as an online service or a program that allows users to process electronic transactions while paying for goods and services through digital currency.
These platforms usually have a QR based option that allows users to simply scan, pay, and avail any of your services.
So instead of asking them to make payment with a credit or debit card, you can simply place a QR code scanner at your hotel premises to accept digital payments.
For this, all you and your guests need to do is link your bank account to the available digital wallet app.
In like manner, banks have now introduced these features in their mobile banking app itself; making it even easier for you to accept payments.
Some examples of mobile wallets are: Mobikwik, Apple Pay, and Citrus Pay.
5. Payment gateway
A payment gateway is the simplest way for hoteliers (and businesses alike) to collect digital or online payments from their website.
It acts as an interface between you and your guest’s bank to transfer money securely and perform any online payments.
In other words, a payment gateway is a software that authorizes you to conduct an online transaction through different payment modes.
These can be net banking, credit card, debit card, UPI, or any online wallets that are available these days.
Basically, it is a master of all the above mentioned cashless payment methods and an essential integration that your hotel software must have.
Some examples of payment gateways are: RazorPay, Paytm, Amazon Pay, and PayPal.
In a nutshell, the past few years have been a rollercoaster of innovation for hoteliers. Starting from paperless, contactless, and now cashless; we are surely on a new ride to success.
And I believe if the industry adopts these practices then customer experience and stay can definitely reach a new high.
But before that, let me give you a quick glance on
What should hoteliers keep in mind while moving to cashless payments?
Turning your hotel into a cashless property cannot be done overnight. It does involve a lot of thinking, planning, and implementation.
Here are a few mandatory factors you should keep in mind for that:
- First and foremost, identify the areas and points where cash-exchange happens on your premises (spa, restaurants, gift shops, etc).
- Analyze and decide which mode of cashless payment would suit the best. For example, if it is a play zone area, then mobile wallets can be the most convenient way to enforce.
- Do not restrict yourself to any one payment method. Always have an alternative payment method for those guests who aren’t active or don’t prefer your chosen approach.
- Adopting the right payment system and ensuring the ultimate security of your guests’ data is the most crucial element that you need to take care of.
Failing to protect your customer’s data will definitely have huge aftermath on your reputation and brand image.
Understanding this, such services are often PCI DSS certified. Thus, ensure that your property and the hotel technology you use is committed to PCI compliance.
FAQs
I am sure, a lot of questions must have popped into your head. And it’s only fair. I personally would not recommend you to go ahead with any method unless you’re clear with all its aspects.
You can implement steady online payments at your property by investing in a solution like a booking engine, a channel manager, a property management system, (and make sure they’re all integrated with each other having several payment gateway integrations to it).
eZee offers a wide range of payment gateways integrations to accept cashless payments. You can have a look at the entire list here.
With cash payments, transparency and accountability are harder to achieve as they are difficult to trace. Thus, digital payments can be more reliable as it increases accountability, tracking, and lowers the risk of theft.
To ensure online payment security for your guests make sure that your hotel solutions are committed to PCI DSS compliance.
In conclusion
Cashless payments in hotels will boost revenues through increased bookings, lower no-shows, and improved customer retention.
This is because guests will be able to complete their bookings with fewer steps and even avail services at your property effortlessly using new payment experiences.
Further, the countless payment solutions available today will enable higher operational efficiency for hoteliers to provide a pleasant stay to guests.
Start implementing all or atleast some of these at your property. You can let me know (via comments) if you need any further guidance on understanding or applying them.
