COVID-19 sent restaurants, hotels, casinos, and the rest of the Hospitality industry on an accelerated downward spiral. Establishments that were once brimming with happy eaters, drinkers, and lodgers one day were empty and closed down the next. It was not so much a downturn as it was a stomach-wrenching drop off a precipice.
As the pandemic raged on and businesses struggled to survive amidst paradigms no one could even attempt to understand, entrepreneurs worked hard to provide some semblance of their former services while simultaneously keeping their employees’ and customers’ safety top of mind. Increasingly, offering options for contactless and socially distant services became expected. Among other innovations to accomplish this goal was the concept of embracing contactless payments.
If you aren’t yet familiar with how they work, now is the time. With federal, state, and municipal restrictions lifted, there is expected to be pent-up demand from customers eager to return to the dinners and vacation stays they have been missing out on for the past year. That being said, these patrons will likely not soon forget the lessons about hygiene and security that the pandemic taught them. In short, you can count on skyrocketing popularity in Hospitality-related services, but don’t expect contactless card readers or virtual payment terminals to go away anytime soon.
Contactless payments defined.
As a consumer, you have probably purchased food, clothing, or other items using this modern enhancement of the credit card. However, you may not have stopped to think how it works or, for that matter, how it could help your own small business. The technology piggybacks on the existing card payment data that credit card customers already have, combining it with the smartphones that most of them carry with them everywhere. Modern smartphones, be they Apple or Android, are even equipped with built-in digital wallets that serve as secure repositories for customers’ credit card numbers, expiration dates, and CVVs. When the time comes to make a payment, the shopper simply places their smartphone near one of your contactless card readers. Within seconds, the sale is completed.
Of course, there is much more that goes on behind the scenes. Both reader and device are equipped with what is known as near-field communication (NFC) technology, an innovation that allows them to transmit information back and forth as long as they are within close range, generally less than three inches apart. Thanks to the software provided by your payment processing company and installed in your reader, the information can be authenticated, encrypted, and conveyed to the various players in the payment process. If the customer is who they claim to be (and if the bank who issued their card says they have sufficient funds in their account), the payment will go through in a matter of mere seconds.
Advantages of contactless payments.
Buyers and sellers alike have already begun to sing the praises of this new, fast, and secure way of purchasing goods and services. Their enthusiasm is understandable when you consider what touchless payments bring to the equation.
They are hygienic.
There is nothing like a global pandemic to raise awareness of the importance of remaining clean to prevent the spread of germs and viruses. Although it is now generally believed that COVID-19 is primarily passed from person to person via droplets, it is also true that viruses can exist on surfaces for long periods, leaving the possibility open for transmission via physical contact.
This explains one reason why contactless or “touchless” payments have undergone such an upsurge in popularity over the past year. After all, why should you or your customers put themselves at additional risk by coming into contact with plastic cards and point of sale readers when the entire process can be conducted without any physical touching at all? The fact that paying in this way is just as or possibly even more secure is an added bonus.
They provide security.
We have come a long way since the old-school magstripe that was featured on credit cards in the earlier part of the century. With sensitive information written in plain view for anyone to see, it is hardly a surprise that so much credit card fraud and identity theft occurred. Today’s contactless technology works with the much more airtight EMV chip cards that replaced their less-secure predecessors.
Each time a purchase is initiated, a unique, single-use token is created that takes the place of the customer’s actual payment data throughout the transaction. This system makes hacking and identity theft infinitely more difficult to accomplish.
You have experienced it as a consumer and behind your own cash register: A customer who fumbles endlessly for their cash or credit card as a queue of shoppers waits impatiently in line behind them. Contactless payments put much of this inconvenience and frustration to an end. Instead of fumbling and searching, a customer simply waves their phone or wearable device near the reader, quickly completing the process and moving to the exit with hardly a pause. This efficiency leads to happier counter staff and more satisfied customers.
They can be easily integrated.
Contactless readers are safe and fast, but what about all of the time that you may have put into your customer loyalty program? The good news is that this technology is totally compatible with the other features of your point of sale system as well as whatever auxiliary database, accounting, or other software you also use to run your Hospitality-oriented business. As a result, you can continue to take advantage of the rich store of customer contact resources you probably started to build before the pandemic. Once you begin to tap into this goldmine, you can reignite your loyalty program, send out newsletters and blogs, and launch promotional campaigns to entice wary patrons to come back.
They offer flexibility.
Another upside to contactless payments is that they can be run via wireless readers that don’t need to be tied to a stationary POS system. If you want to jump on the expected upswing in the Hospitality business, you’ll need to mount aggressive marketing campaigns to remind people who you are and why they should choose your business over all the rest. One way to accomplish this goal is to take your marketing on the road. When people can make payments from a pop-up location, a meet-and-greet, or a fair without any trouble, you might well have the leg up on a competitor who is not as agile and does not offer this degree of flexibility.
What will the world look like once the pandemic is relegated to the history books? While the answer to that question remains a mystery, we can be sure of one thing: Many of the innovations that became accepted and embraced during the worst of COVID-19 will remain. Since contactless payments look to be one of these enduring phenomena, there is no time like the present to incorporate them into your Hospitality-oriented business!