A recent study from PYMNTS.com and Amadeus reports just 15 percent of travel companies have attempted hospitality payment innovation in their systems over the last three years—despite the high bank fees associated with fragmented international business models.
The report notes that third-party fees associated with consumer payment average 4.7 percent for airlines, 6 percent for hotels and 7 percent for travel agencies. But paying those fees is still often the cheapest option, given that the only real alternative is to build a payment system from scratch, buy expensive equipment, and hire new people to run the system.
For smaller companies, even the thought of implementing an in-house payment system can seem like an insurmountable roadblock to payment innovation and progress. Cost benefit must be analyzed with scrutiny to start, and the man power for that type of analysis can stop a small business’ innovation in its tracks.
The good news, the report notes, is that the travel industry is at a tipping point of innovation, mainly brought on by increasing customer demand and fueled by general fee exhaustion in the wake of promising third-party alternatives.
Customer demand is a relatively new concept in the payment realm. For decades, all consumers dealt with the status quo of cash or check. Then the advent of the credit card came into play. As the swipe of a card became the dominant mode of payment across most industries, adoption of credit card readers was a simple no-brainer for hotels and resorts. However, in recent years, technological advancement has peaked in the payments market and it shows no signs of slowing. Within the last few years, we’ve seen new modes of payment take hold that make it even easier and safer for customers to pay for goods and services. As hospitality professionals, we know that these clear ways to support the guest experience from the get-go cannot continue to be ignored.
But hotels are beginning to prioritize the need for newer payment options, and they’re asking questions about the advancement and potential cost-savings of blockchain or the rate of adoption for Apple Pay. Most of these numbers aren’t pure speculation. They can be measured, and hotels and travel agents can assess the available opportunities and begin making those pivotal decisions regarding potential ROI of payment technology adoption.
As the market for payment expands, the hope is that pricing will become competitive, or a new winner will become the consumer favorite for years to come. As the landscape evolves, Onyx is prepared to support and adapt to the payment technology demands of our customers in hospitality, both today and in the future.