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Section 1
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Disruptor Series
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Section 2
1 Enabling Innovation with Security
1
3 Alternative Payments
4 Guests Demand Flexibility
SOLUTION SPOTLIGHT
4 Trends Influencing Payment Innovation in Hotels
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4
Meet the Think Tank Description
Influx of International Guests Expect & Demand Digital Payment Methods
2 Global Travelers
2
Trend 1 Blurb
Trend 3 Blurb
Trend 4 Blurb
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As payment technology rapidly evolves, hotels are exploring new ways to offer payment convenience to guests, alternative payment options, and tighter payment security.
Mihai Bote CHTP, Director of Technology, Swire Hotels
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Hospitality Technology and Sertifi partnered with hotel technology executives and thought leaders to explore major themes in payment technology and discuss how to make the future of payments today's reality. Click on the photo gallery for Payment Innovation Think Tank members’ insights to top trends influencing payment innovation in hotels.
Rob Martin Security & Financial Technology Executive, Dielectron Security, LLC
Marilyn May Director of Payments & POS Solutions, IHG
Gustaaf Schrils CIO, White Lodging
Jason Shane Sr. Director of IT, Hersha Hospitality Management
David Starmer CIO, Sonesta Hotels
Richard Wagner, Network Architecture & Emerging Technologies, Marriott International
Javier Garcia Director of Global Infrastructure, Mandarin Oriental Hotel Group
Jeffrey Parker Vice President, Hospitality Systems, RLH Company
“As we move towards a cashless society, mobile payment represents a clear opportunity to improve every stage of the travel experience. Travel and hospitality providers should use this opportunity to ensure that mobile payments are possible, available and integrated, on these new platforms.” - Mihai Bote, CHTP, Director of Technology, Swire Hotels
“The new methods of electronic payments must allow hoteliers to continue managing seamlessly the typical situations of no-shows, service charges, post-charges, etc.” - Javier Garcia, Director of Global Infrastructure, Mandarin Oriental Hotel Group
“Many newer payment methods do not easily fit with the convenience of paying after the stay is complete while at the same time protecting the hotelier's inventory. The challenge for hoteliers is to offer guests the ability to pay using their preferred payment method without disrupting the post-pay convenience of today.” - Rob Martin, Security & Financial Technology Executive, Dielectron Security, LLC
“Consumer expectations regarding interactions and connectedness will drive different experiences in all industries, and will shape how payments are transacted in the future.” - Marilyn May, Director of Payments & POS Solutions, IHG
“Hotels need to be proactive and implement the infrastructure to allow them to be flexible to how guests want to pay. The swipe and ‘knuckle dragger’ era is over, we need to be ready to dip, tap or scan - guests are demanding it.” - Jeffrey Parker, Vice President, Hospitality Systems, RLH Company
“The influence of advanced communication, encryption, biometrics, AI and predictive analytics will change the landscape of the payment space where simplicity, flexibility and self service will be the cornerstones. Flexibility in terms of location, currency, and the speed of all types of transactions will accelerate and security will be enhanced. The challenge that needs to be resolved in advance is how to handle a cashless society and protection of our privacy.” -Gustaaf Schrils, CIO, White Lodging
“I believe the number one thing that will lead to true change in the space is to create a standardized payment business/API so that payment methods and capabilities of each could snap in as long as it follows the standards. Capabilities for each method is important in considering exchange rates, settling times, charge backs, and other governance. While it would provide great value for merchants, standardizing may take a back seat to having a competitive edge.” -Jason Shane, Sr. Director of IT, Hersha Hospitality Management
“We are witnessing a shift in payments that is going to be more disruptive than the introduction of the first charge card. Mobile applications are disintermediating card issuers and financial giants. Successful merchants, hotels included, should be agile enough – and willing – to accept tender in most any form in which the guest should choose to present it.” - David Starmer, CIO, Sonesta Hotels
“Due to ever-changing payment options, it is important for hotel management companies to determine which payment methods need to be supported in order to provide guests with the type of technology that they prefer. This will allow the management companies to continue to maintain guest loyalty.” -Richard Wagner, Network Architecture & Emerging Technologies, Marriott International
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Chapter 1
Back
Security as Enabler of Innovation
TREND 1
“We feel like we just went through PCI and EMV and we’re just trying to catch up on regulatory issues,” Jason Shane, vice president of IT, Hersha Hospitality Management, says. This has resulted in an overall sluggishness in payment innovation. View security as an enabler of innovation. Once there is the realization that solutions are available to free hotels from many of the concerns around security, the industry can see momentum. In the case of Hersha, Shane admits seeking “low-hanging fruit.” Hersha adopted Sertifi to mitigate risk after a threat assessment revealed concerning issues – the brand was still using fax, as an example. Consider that hotels are largely still paper-based and opportunity is ripe for hotels to utilize innovation to address regulatory issues and shrink risk gaps. For Shane, cloud technology is a solution for difficulties inherent in changing gateways. Marilyn May, director of payments & POS solutions, IHG, acknowledges there is a difference between getting current and getting a couple years ahead. “By the time you roll changes out, they’re obsolete,” she says. “Hotels have to devise security postures that will be fit for purpose for three to five years.” The ideal view of payments for hotels is one where they would not have to take and store a credit card number ever again. Solutions that make it easy for hotels to accept alternative payments, such as Venmo, would serve a dual purpose: it removes risk burden from hotels since credit card numbers are not involved; and guests have another payment option.
The number of physical terminal compromises in payment card-related breaches is decreasing, in part due to the implementation of chip and pin technology. Sentiment among hoteliers is that when it comes to payment security they are stuck in a “one step forward, two steps back” quagmire.
HIGH
VERY LOW
Rating Strategic Goals for Technology
MODERATE • Seamless reservations across channels • Enhancing guestroom technology • Increasing employee productivity • Improving business analytics
Low • Reducing cost of labor • Improving employee-facing technologies • Reducing cost of managing technology
Very Low • Enhancing bandwidth • Migrating solutions to the cloud • Deploying cutting-edge technologies
High • Improving digital customer engagement • Supporting new revenue opportunities • Improving guest analytics
+ Enhancing payment and data security
50% of hotels have breach protection. This is double the percentage that had it in 2017 (26%). 70% of hotels have upgraded terminals for EMV/Chip-based cards (44% in 2017). 62% use tokenization instead of storing card numbers (46% in 2017).
Click "+" to reveal Goals
Source: Hospitality Technology’s 2019 Lodging Technology Study
Trend 2
xxxx
TREND 2
Global Travelers: Influx of International Guests Expect & Demand Digital Payment Methods
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Section 3
Chapter 3
“We want to capture that Asian traveler and hotels have to realize how impactful these travelers are going to be,” Mihai Bote, director of technology, Swire Hotels, says. “No one uses cash or credit cards in Asia. WeChat does everything including government IDs. As more consumers are exposed to that environment it is going to force us to act faster in America.” Richard Wagner, network architecture & emerging technologies, Marriott International, acknowledges that for an international brand to support Alipay [in China] it’s not a big deal, but to do so in the U.S. it proves more difficult. “There are all these competing technologies and no consensus,” Wagner said. “It’s coming and we need to support it, but we need to identify a winner before we invest.” Rather than identifying a “single winner,” hotels that want to integrate multiple payment types – like Zelle, Venmo, Alipay or WeChat, will need a trusted partner to handle those integrations. Consider OTAs as aggregators: they ultimately make it easier for the consumer. As hotels struggle with multiple payment types, it will be key to find partners to handle integrations to the POS. An ideal scenario would be to have a top layer software of all POS solutions that will enable hotels to integrate once, while providing a frictionless experience to guests and allow them to pay in whatever way is most convenient for them.
Online and mobile payments dominate the payments landscape in Asia. The United States is far behind other countries in terms of payment innovation and acceptance.
50 million
new outbound travelers from Asia-Pacific will be added by 2021.
Source: Mastercard Inc.
40%
The rise in online payment methods and alternative payments has driven China’s e-Commerce growth
Source: Accenture
65% year-over-year.
of in-person spending in China is via digital wallet.
Click over the icons to review eye-opening stats
Explore the gallery
TREND 3
Alternative Payments Will Empower
Gustaaf Schrils, CIO, White Lodging, says that there has been a lack of excitement to roll out alternative and mobile payments because of bottlenecks that are created by credit card companies and banks. “It’s not the technology or time to get these things certified,” Schrils calls out. “It’s because the card companies are benefitting from the chargebacks. There is a desire to not impact these macro-economic issues and that is why many are not making them available. They tell the consumer they are worried about their security and implement standards, but what they say is one thing and it’s very different from what they do.” Charges to hotels levied by credit card companies and issuers are hidden from consumers in cases of fraud or suspected fraud. The responsibility for fees and chargebacks would shift in scenarios where businesses accept PayPal or Venmo and no longer hold guests’ credit card numbers, allowing hotels to address PCI issues from a position of strength.
As alternative payment methods gain steam in public usage, there are benefits for hotels accepting these digital transactions. In addition to being globally recognized and appealing to international travelers, APMs such as ApplePay may provide a way for hotels to avoid handling guests’ card numbers, instead using tokenization to provide a single use code.
30%
revenue growth predicted in mobile payments by 2022.
Online payments industry in India by 2020 – a tenfold growth.
$500
BILLION
Amount saved per property, per year in credit card processing fees by a global hotel company who deployed Sertifi’s Agreement Platform and adopted ACH payments.
$12,000 - $15,000
TREND 4
Guests Demand Flexibility
Guests increasingly expect technology in hotels that is similar to what they have at home or is offered at other businesses including retail and restaurants. IHG’s Marilyn May points out the multiple points of entry for guest payment on hotel properties and guests will have different expectations for each. “There will probably be a faster road for demand for mobile payment on the F&B side,” May says.
Trying to home in on one “payment winner” is a daunting prospect. As White Lodging’s Schrils explains, “Guests want flexibility at each of the terminals as to how they pay and that desire isn’t going away.” These guests will also expect the same capabilities across a brand’s properties. They will want to be able to use the same technology and services regardless of which location at which they happen to be. Schrils calls out the need for standards so options can exist without needing four or five different terminals, but rather one device that can take all types of payments from all systems and still “securely, without storing card holder data on-site, complete a transaction.” Hersha’s Jason Shane takes it a step further and calls for industry change. “The technology infrastructure needs to change,” he says. “We need vendors to offer an ‘insert payment type’ option on systems instead of an individual card type.” The hotel industry has long been feeling overwhelmed by being forced to wait for solutions and answers. Fortunately, the status quo is changing. The days of businesses simply “doing payment themselves” and hotels being passive victims are over. Good payment partners will allow flexibility and ease of use so hotels can accommodate customers’ preferences as simply as pressing a button and signing.
More than half of guests want mobile payment options at hotels.
of hotels offer mobile payment.
51%
$927
MILLION
Transaction value of the digital payment method market.
Source: Statista
28%
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Empowering & Securing Hotels with Innovative Payment Solutions
“Alternative payment methods are transforming the way payments are handled. They offer that perfect blend of security and convenience which is what payment vendors need to continually strive for as they develop new solutions. Hotels need to embrace these emerging payment methods, or they risk guests taking their business to a competitor that offers that flexibility and choice. If hotels can offer different payment methods that minimize the exposure of credit card information at their property, then they’re also better protecting themselves and their guests from a breach.”
JOHN STOJKA: Security should always be a top priority among payment technology partners, but convenience cannot be compromised either. Partners need to strike that balance between the two if they want solutions to carry weight among hoteliers. Hoteliers need to consider both factors when selecting new payment technology. They need to hold vendors accountable too in terms of continually investing in their products to make them more secure, keeping in mind that it doesn’t impact the end-user experience with the solution and business. People expect the companies that they work with to protect their information. Hotels should be selective about the payment technology vendors that they work with and pay attention to what vendors are doing in terms of ensuring the information that is passing through their system is being protected. In terms of convenience, offer flexibility in how guests can pay.
What is a key attribute of a future-ready payment technology?
-John Stojka, Co-Founder, Sertifi
STOJKA: Security threats continue to increase because hackers become more adept at stealing data. Hoteliers need third party partners that are well-versed in payment security to add those extra levels of protection to their existing solutions. Hoteliers must examine where “holes” are and determine what technology they need to fix them. And they need to evaluate partners that are investing in the latest in technology that protects their data. One of the “holes” that makes hotels vulnerable is easy access to credit card numbers. Minimizing human exposure to credit card numbers is a step towards warding off hackers from attempting to steal information.
With hotels remaining a top target for hackers, how must security practices evolve?
STOJKA: Hoteliers should look to partner with a middleware provider that can safely and securely capture sensitive payment information and send it to different payment systems minimizing credit card number exposure. That extra layer of security gives everyone peace of mind and is another area that a hacker would need to breach to access the data.
As guests demand payment options, how must hotels prepare?
STOJKA: Payment solution partners need to offer ways that remove risk from hoteliers so guests are better protected from a breach. We need to get to a place where it becomes an industry best practice that hotels never have to store credit card numbers onsite. Every time a card number passes through the hotel it should be tokenized so there is less human exposure to sensitive information. Tokenization also helps enhance PCI compliance at the hotel. Another way for hotels to reduce risk of a breach is to offer alternative payment methods such as Alipay, mobile wallets, and WeChat. These payment methods minimize credit card visibility at the hotel and in turn, guests have the flexibility and convenience in paying how they want.
How can payment solutions empower hotels to be innovative and secure while avoiding massive costs, fines and chargebacks?
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Executive Insight
1. Enhance PCI compliance with tokenization, IP restrictions, and data retention limits 2. Easily identify sales velocity with reporting capabilities 3. Reduce operational costs such as on-site storage, paper, ink, etc. 4. Increase on-the-job efficiency with a digital way to send and receive agreements 5. Provide guests an easy and convenient way to do business with your hotel
Top 5 Innovative Features
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