Cryptocurrencies, virtual cards and PSD2: the new hotel payment systems

Payment systems are a key factor of the hotel . Above all, because they are directly related to the customer experience and accommodation management. That is the reason why failures in these tools imply dissatisfaction on both sides. Hence, they should be so careful. At least, if the accommodations do not want to lose sales because of a bad experience. Especially now that the Payment Services Directive (PSD2 ) has changed the way things are done.

At TecnoHotel Forum 2022 we brought together four experts in the field to offer all attendees their knowledge in this area. For this reason, we had Toni de Frutos , IT director of HCC Hotels, at the discussion table ; Manuel Herrero , Business Development Manager – Iberia & Greece at Planet and Pancho Pérez , Business Developer at PaynoPain.

In addition, Esther Montalvá , a lawyer at Pérez Montalvá and deputy for Digital Affairs of the Madrid Bar Association, was our moderator. To get into the matter, she began by ensuring that ” we need new players and payment providers , but with specific regulations.” She affirms that “the more competition there is between payment providers, the lower the prices and, therefore, companies like those of the speakers are created.” This is how new figures are also created, such as those of initiators of payment services .

“It seemed impossible that we could have all our financial information together,” he continues. “Now we have to have a payment service initiator integrated or be ourselves. The solution is to go through banks or open your mind , not question current conditions. We also have to look for new suppliers that are going to help us better manage our business”, he affirms.

However, he believes that a major problem is that hotels often do not have a complete picture of the overall financial situation. In addition, now that all systems have the double verification step integrated, when should I make the payment is one of the most frequently asked questions.

Impact of the arrival of PSD2

Toni de Frutos begins by explaining that, during 2020, there was already talk of this new PSD2 directive that came into force in January 2021. At that moment, he supposed to stop how things were being done, because there were procedures that had not been touched on in 10 years. He even tells that there were agencies that sent scanned cards by fax. Because the guideline was that the data could not be stored directly in the hotel systems, he affirms that the cards were tokenized by his PMS.

Thanks to this, they could be outside the system. Thus, at the time of making the payment, they were accessed from there. «Now neither can any collection be made without the client being part of the process , hence the typical SMS that the bank sends. We integrated the product of a financial institution and we are working. We were scared that with half of the workers in ERTE or at home with the pandemic, we did not have the necessary strength to make technological changes. But it helped us that there wasn’t a bulk of customers who could experience the first interactions of any changes caused by PSD2 ″, he confesses.

With this detail, the IT director of HCC Hotels acknowledges that they continue with a financial company because they have not been left behind, they have tried to “catch up with the new players”. For his part, Manuel Herrero explains that, as Planet is a software company, they are dedicated to integrating all the technological partners of a hotel with other solutions. “On the other hand, we support different means of payment and we can process traditional cards or those more common in Asian countries.” In the end, he concludes by explaining that the essence of any solution is to make the hotelier’s job easier .

In the case of PaynoPain, Pancho Pérez assures that he had been talking about PSD2 for five years before it was launched. “But it was the tale of the wolf,” he says. On top of that, since it was postponed for two years and in the end it was launched in the midst of a pandemic, nobody seemed to take it seriously. In spite of everything, he considers that it came at the best moment, because it was when “the hotels had time to see how to stop it.” In turn, he acknowledges that integration varies greatly by channel .

“We become a piece that must understand the processes of the booking engine,” he continues. He also explains that the natural place of the payment gateway is the PMS . Of course, he clarifies that they are not dedicated to connecting. “The connection is bidirectional, but we get inside the person who makes the reservation to help,” she clarifies. In turn, he reveals that “one of the hardest jobs is the integration with the PMS, because it affects the hotel’s processes.”

Problems derived from payments

Next, the moderator assures that many questions related to payments are transferred to her office, especially from PSD2. “I tell them to be creative,” she says. For example, she proposes to hoteliers that they offer alternatives to the guest so that, “if they pay in advance, they enter the spa.” She thinks that you have to bet on details that invite the guest to formalize the payment and deliver the data before .

In this sense, Pancho Pérez insists that tourism is the only sector in which you consume without paying . In addition, he explains that it is important to distinguish between card types, since prepaid cards, for example, are exempt from authentication. Meanwhile, Toni de Frutos affirms that “you have to go with the philosophy that the customer validates the payment.” “In the end, the hotelier has to know what the competition is doing, because if Booking offers free cancellation and you don’t add that flexibility, you are throwing dirt on your own roof.”

During the presentation, a hotelier takes the opportunity to ask from the audience how to manage the payment of guests who come from OTAs . The PaynoPain Business Developer clarifies that it depends on the integration they have with their provider. With Booking they do have permission to manage the payment, as long as the rate is not changed. In these cases, they send a payment email without style, so that it is neutral, but personalized as little as possible, so that it conveys trust and does not appear to be phishing. “In our case, we have made a significant effort and the PMS makes this shipment automatically, identified with the hotel’s email,” adds the IT director of HCC Hotels.

Are bitcoins and cryptocurrencies worth it?

After talking about the impact of PSD2, it was time to question other forms of payment in the hotel. For this reason, Esther Montalvá questioned the weight of alternatives such as bitcoins and cryptocurrencies. The first to respond was Manuel Herrero, who responded with a resounding “I don’t see them.” “The news of 2014 is the same as it is today, because crypto payments never arrive . They are still a stock market to preserve savings, but nothing more », she explains.

Not only that, since Planet’s Business Development Manager assures that they hardly saw requests of this type among their more than 800,000 clients globally. It is the opposite of what happens with other alternative payment methods, such as the Chinese giant WeChat . Meanwhile, Pancho Pérez assures that in his case they decided to incorporate it, but in part because they also work in other sectors, such as video games.

“In hotels there was some interest too, but less,” he adds. Above all, he explains that the demand has come from luxury hotels . The key to this method for him is that as they do the conversion to cryptocurrency, the provider pays a fee and they can thus get a commission that depends on the volume. In addition, he reveals that “there are people with a lot of crypto, because there are a lot of people who don’t know where to spend.”

From HCC Hotels, Toni de Frutos affirms the following: “as a hotelier, if you tell me that if I accept crypto, a client comes who didn’t before, well I’m going to accept”. On the other hand, Pancho Pérez adds that there are certain profiles with specific needs. “Germans don’t like cards, so the hotel has to work on this,” he adds. Manuel Herrero agrees and, above all, talks about the importance of the Asian market . “You need to work with the tools they prefer, like WeChat, if you want to be successful there.”

The role of artificial intelligence

As a finishing touch to the discussion table on the impact of PSD2 and the new hotel payment systems, Esther Montalvá asks the participants if they are working with artificial intelligence that analyzes their information. “In the data analysis part, the idea is to recommend the method that is most convenient from our point of view,” begins Pancho Pérez. The problem is that they do not have data on the marketing effort or how much was invested.

Along these lines, he affirms that “a fight for years is that whoever makes the revenue includes the payment method in his information,” he assures. In addition, he explains that it is necessary to understand “where your client comes from, how often and how they would like to pay, because it is not always worth incorporating a new payment method.” Beyond this, he believes that hotels have to be more captive in the way they captivate and charge tourists.

Returning to the treatment of information, Toni de Frutos explains that he, as a hotelier, has focused on data, starting with the PMS. “We have noticed that operations with virtual cards are being implemented, not only by OTAs, but also by individuals,” he says, as a way of looking towards the future of hotel payments. On his part, Manuel Herrero closes by encouraging reflection. From his perspective, the essential thing is “to assess whether, even if it is more expensive, it is worth having that reserve.”

As conclusions, the moderator states that every hotelier has to implement an effective system and review their information and privacy policies. It is necessary to be transparent. Also, train customer service teams so that they can properly inform guests after the changes implemented by PSD2. « We have to rethink the processes, even if it costs us . Tokenize the cards and take them out. Do not lose sight of the need for advice. Let’s focus on the data. And let’s not be afraid to be creative in those purchase funnels », she concludes.

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