How fintech is transforming the travel and hospitality industries
20 / 12 / 2022
As 2022 draws to a close, travel spending is showing signs of a strong recovery from the pandemic. And, as lifestyles and consumer behaviour continue to influence industry trends - particularly when it comes to payments. Only a decade ago, paying for travel or hospitality services via bank or credit card was the only realistic option. However, as itineraries become more complex and expensive and demographics slowly shift, the industry is beginning to embrace a plethora of new payment methods which ultimately provide a better experience for clients who are now used to tapping on a Smartphone screen to make their online purchases. So what are the latest payment trends gaining popularity and what advantages do they offer to the travel and hospitality industry?
Digital Wallet & Digital ID
Identity is one of the great challenges of the digital age. Trust is one of the most important components for success when you are doing business with someone or trying to access a product or service of some sort. But in a world of remote transactions behind computer screens, trust is increasingly difficult to establish.
In June 2021, the European Commission set out to tackle this problem head on. It proposed to give every EU citizen a set of strong digital identity credentials that will be recognised anywhere in the zone. These credentials will be accessible through a digital wallet and available to anyone from their mobile device.
Why is this relevant to payments? Providers, including Worldline, are currently taking steps towards integrating their systems into this new digital wallet, to create a more seamless customer experience when booking, guaranteeing, and paying for T&H products and services. This would also dramatically save time, money and improve customer experience when booking a hotel or a flight if a customer’s digital ID is already verified and officially approved.
Augmented Reality (AR)
Augmented Reality has emerged as an important concept within travel and hospitality management in recent years because it allows hotels and other related businesses to enhance the physical environment, products and services that they are selling. In terms of its relationships with payments, this technology is designed to provide customers with a real experience of what they are purchasing before they purchase it.
For example, if a customer decides about to rent a vehicle, they may want to see what it looks like. They may even want to “test drive” it whilst in the comfort of your own living room. AR provides the perfect opportunity to do exactly that.
Alternatively, in the case of resort or cruising holidays, AR can act as a powerful technology to fully immerse the customer within a hotel or ship’s environment, ahead of them making a final purchasing decision, as part of a “try-before-you-buy” experience.
Conversational commerce is a new way for businesses to interact with their customers through messaging and chat apps like Facebook Messenger, WhatsApp and others. Customers can make bookings, get support and personalised recommendations, and even purchase products or services – via a payment link - from within the messaging apps themselves.
Central Bank Digital Currencies (CBDC)s & Non-Fungible Tokens (NFTs)
One final trend to mention from a future gazing perspective is that of CBDCs. Whilst developments around this new initiative have not yet been formally announced, industry experts expect more information around CBDCs going live to be available in the new year. In essence, CBDCs are digital replications of existing monetary cash value and should be on the 2023 agenda of any T&H business looking to advance their digital payments capabilities.
Meanwhile noise around NFTs has been prevalent in recent years, particularly in relation to the art industry. But, as businesses accelerate their rates of digital transformation, it won’t be long before T&H organisations favour the issuing of tickets, provision of hotel room services, the reduction of carbon footprints and much more, via NFTs. T&H professionals that aim to improve the customer journey through time and cost reduction should consider NFTs, particularly as these can be added to any travel and hospitality payment service.
When combined with a customer’s digital ID, CBDCs could dramatically prevent fraud or loss of funds amidst an accelerating shift towards cryptocurrency assets.
As the industry evolves to cater to a more digitally savvy clientele, it must account for the permanent changes to the consumer landscape. Today, customers are more technically aware and eager to use various methods to pay and interact with their favourite brands. Therefore, brands must remain abreast of the latest fintech solutions and incorporate them into their offerings to operate more fluidly at the forefront of the emerging market boom and creates better levels of loyalty and engagement with customers, in the long term.
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