Isn’t it wild to think that we would go to the post office for traveler’s cheques a few decades ago?
As our society has become more digital, so have our spending habits. The COVID 19 pandemic is accelerating this change.
In 2020, 13.7 million people went cashless for payments. That’s almost a 50% increase from 2019.
Comparing how we spend money compared to 10 years ago, five out of six payments involve no “real” cash. It’s all digital payments via your credit card, any ETFs you have, or even through a PayPal account. All of these options work just as well as each other, so it will ultimately come down to personal preference.
Because we are moving towards a more cashless society, what will this mean for the hospitality industry? If you want your restaurant, hotel, or tour company to stay relevant and up-to-date with the future of travel – you need to innovate.
Below, I’m breaking down the good and the bad of contactless travel. Plus, what brands are already doing to stay ahead of this trend.
What Are Cashless Payments?
Cashless payments or transactions are made without the use of physical money.
These payments include swiping or tapping your credit or debit cards, QR scanning, EFTs, NFC, Apple Pay, and any other form of online payment.
In the near future, there is also the possibility of cryptocurrency falling into this bracket too. Though you can mine for this type of currency by looking for something like this goldshell kd5 in stock option, it is more common for people to buy and trade such currencies online.
If all goes right, this type of payment may also be seen in the hospitality industry in the near future.
But what does this mean for hospitality?
What Are The Benefits of a Cashless Society for The Hospitality Industry?
Off the bat, cashless payments are more convenient.
Forgot your wallet at home? No problem!
Your card isn’t swiping? Scan the QR code and pay in seconds.
Cashless payments remove a lot of boundaries for the consumer and hospitality brands. You can streamline your revenue system and give guests more than one way to make a payment by going digital.
Here are the biggest benefits of a cashless society for the hospitality industry:
- It’s safer. You no longer have to hold large amounts of cash on your premises. This reduces the amount of money you’ll need to spend on security.
- It reduces fraud. With NFC payments, the technology tokenizes and encrypts the data to prevent criminals from intercepting it and making unauthorized purchases.
- Guest and staff convenience. Cashless payments are quicker, and guests can use the technology to accumulate expenses throughout their stay. When it’s time to check out, guests can view their invoice and pay it. It saves your staff from manually keeping track of transactions and tallying up amounts at the end of a stay.
What Are The Disadvantages of a Cashless Society for the Hospitality Industry?
While the benefits of a cashless society are tempting for hospitality brands, it’s not a perfect solution.
We are not at a place where we can completely reject cash payments. Here’s why:
- It excludes a chunk of your consumer base. According to a study by the FDIC, 8.4 million households in the United States don’t have a bank account. By only accepting cashless payments, you’re alienating your brand from a large part of the economy.
- You have to pay transaction fees. A major disadvantage with cashless payments is the credit card fee on each swipe. These fees are the reason why some brands offer discounts for cash payments.
- It’s the consumer’s personal preference. Some travelers don’t want to travel with a credit card or use NFC payments to resist the urge to overspend. By taking away personal choice, you risk losing business.
How the Travel Industry Is Encouraging Cashless Payments
Curious about how some brands are encouraging consumers to go cashless?
Restaurants and hotels are adding QR codes onto invoices. All the consumer needs to do is scan it and complete the payment. Regarding reservations, restaurants have an online system to take bookings and request a minimum spend upfront.
Card Payments with Visa
In 2018, Visa created the “Cashless Challenge. One lucky traveler would win a trip and use only their Visa card to pay for flights, food, activities, and hotel stays. The idea behind the campaign was to encourage more cashless payments and show travelers how little physical cash one needs to travel the world.
Cashless Travel Insurance
Travel insurance companies like Icicilombard have hopped on the cashless trend by introducing cashless travel insurance plans.
In the past, you would need to pay for your doctor’s visit upfront. With a cashless plan, the bill goes straight to the insurance provider. It simplifies the process and removes the step of having to file the insurance claim to get reimbursed.
In popular travel destinations like London, you don’t need cash to use public transport. All you need is our contactless payment card, and you can tap and go.
Another destination that is following the trend is Singapore. Instead of buying a separate fare card, travelers can use the SimplyGo cashless system. It allows visitors to use their foreign credit, debit, prepaid card, or mobile wallet to pay for bus and train trips.
One of the biggest hurdles with cashless payments in the hospitality industry is tipping. With guests no longer carrying cash, how will staff get rewarded for providing excellent service?
The answer: digital tipping.
Guests can now use apps, contact tapping, or QR codes. Add a QR code to an employee badge, table, etc., and guests can simply tap, tip, and go.
All you need to do is set your business up with an app like eTip.io.
With more travelers going cashless, the hospitality industry needs to innovate.
If you neglect to go digital, you’ll lose business from the millennials and Gen Z’ers. If you go completely cashless, you’ll lose money from travelers who want to pay the ‘ol fashion way.
Cash is not going anywhere. However, a blend with the digital is a must to offer your guests the best of both worlds.
Have you started preparing for a cashless society in your hospitality business?