Seamless automation of payments using an online payment gateway is becoming essential for both an excellent guest experience and robust cyber security.
Do you have any credit card data stored in your back office? If so, then, like many accommodation businesses, you may be at grave risk. The threat of data fraud is real and using clunky payment terminals or asking guests to fax or email card details is like leaving your back door open for hackers and fraudsters.
Criminals are finding innovative ways to steal credit card information from unsuspecting sources. The recent breaches at Mandarin Oriental, Starwood and Hyatt are all cases in point. The Mandarin Oriental group are currently weathering a 5 year notice period and are in serious danger of getting thrown out of the entire Visa and Mastercard networks. If it can happen to a large chain then it can happen to anyone. Stripe has also witnessed an unprecedented global increase in online fraud and believe it’s only going to worsen. So, in terms of future-proofing a business, cyber security is becoming more critical.
Furthermore, there is a benefit to an integrated platform that gives one unified and clean experience. By connecting a PMS with a booking engine and online merchant, hotels get access to infrastructure they would not have before, which can drive an increase in bookings and a better customer experience.
We appreciate that the transition from offline to online does not happen overnight and that there are still many unanswered questions around why the cloud is a safer vault, so we tried to answer some of the key ones below:
Why should I change from my current offline system? My payment terminals already work…
For four reasons 1) it will save you money and time 2) it will increase your revenue 3) it will drastically improve your guest experience 4) it is more secure
Let’s dive into the detail…
So how would I save money? I want to be paying less for processing payments so why should I pay a higher % rate for using an online solution like Mews Merchant compared to my current offline terminal?
Let us explain – the reality is that the lower headline % processing rate you pay for your current POS terminal is not the full picture. Your current terminal is, in fact, more expensive than using an online solution like Mews Merchant because of the hidden costs. It is important not to just focus on the processing cost represented by that headline figure. The higher % for an online system also includes fees for new services that are crucial in saving you money in the long term such as card data storage. So consider what the total cost of ownership really is.
But how exactly do these extra services save you money?
Firstly, your time costs money. The integration of a payment solution with your PMS allows for full automation of payments, saving you time and minimising human error. A dashboard with real time and detailed reporting allows you to become even more financially efficient, while you can also intelligently manage potential fraud and disputes to reduce losses from them. You don’t need to spend time dealing with your local bank or set up a payment gateway yourself and have a finance person sort through difficult to read financial reports. This empowers your organisation and finance team and, as your hotel scales up, you won’t need to hire additional finance people.
If hostels are still stapling receipts at reception then that means the manual consolidation of these accounts in your back office is ripe for change and huge cost savings can be made. Although there is plenty of money to be saved, it is important to remember that these savings are not as direct and tangible as those eye catching processing commission rates, which entice you to make like-for-like comparisons.
For example, Mews systems recently helped one hotel better manage their ‘no shows’ who had booked with invalid credit cards. Mews discovered that they hadn’t started using all of the advantages of automation: huge savings could have been made by automatically cancelling those bookings and reselling to customers with valid cards. What had happened was that all of the hotel’s automation was still switched off because everything had historically been done manually so there were huge inefficiencies in managing non-refundables and charging them at the time of booking. So despite the apparent higher up-front processing costs, they ended up saving themselves money.
Switching on automation saves your team time by efficiently running the charging of credit cards and frees them up to focus on the all important guest experience.
Another benefit of an integrated platform is that you have a unified and clean experience with only one point of contact for queries and help. With a lot of current providers, interactions can be riddled with delays and complexities on account of having to deal with multiple parties. Ultimately, this makes hotels unwilling to educate themselves about how best to utilise the product.
Finally, the threat of data fraud is genuine. A breach in your security can have crippling financial and brand implications, not to mention any fines that you may have to pay. The automation of payments empowers hotels to ensure that their brand and the customer experience is consistent with what they want to offer throughout the hotel or chain while also protecting against cyber crime.
Source: Mews Systems, October 2017