Is your hotel ready for a cashless society? A cashless society is one governed by the lack of physical currency such as notes and coins. In the past, it would have consisted of bartering and the exchanging of goods or livestock. Today, it is represented by digital currency like Bitcoin and electronic payment systems.
It’s no secret that all aspects of our daily life are being enhanced or changed by technology, but a complete digital overhaul may not be too far around the corner. Even during the 1990s, electronic banking was spiking in popularity.
The trend starts in major cities, where governments, companies, and consumers alike are pushing towards a cashless revolution.
What are the pros and cons of a cashless society?
There are numerous benefits involved in a move towards cashless transactions.
From a hospitality perspective, it offers a heightened sense of convenience for guests. Take Uber as an example. Customers get to where they’re going without having to worry about the payment at all; everything is handled digitally after the experience is complete. If the same service could be offered at all hotels, not only would guests experience less friction but hotels could potentially derive more revenue from extra bookings and amenities.
Without the hassle of settling payments, guests may be more inclined to take advantage of your offers.
Other advantages include:
- Improved service and efficiency
- Reduced human errors and labour costs
- Eliminated hassles of dealing with a manual payment process
A cashless society would also help discourage money laundering or criminal financing and would give governments more control over income and proper payment of tax, ultimately strengthening the economy.
The idea of going completely cashless does have its detractors. Some are worried about the prospect of the nation state or third-party providers having complete control of transactions, individual money use, information on public monetary assets, and interest rates. Individuals will have less control over what happens to their money and the risk of hacking increases.
It could also cause some serious short-term problems for nations not prepared for it. India is a country highly reliant on cash transactions and the government’s recent decision to ban currency notes of Rs. 500 and Rs. 1000 as an official mode of payment took the nation by surprise.
The consequences of this have been problematic for the tourism industry:
- Tourists have cut short their trips due to the banks and ATMs not coughing up enough money to cover their expenses.
- Many travellers have cancelled their trips at the last minute due to non availability of cash in the market.
- November to February, the peak wedding season, has taken a hit.
- The hotel industry is finding it difficult to make the payment of daily wage for help and labourers.
Many nations could be cashless from as soon as 2022 so hotels need to be prepared.
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Who is at the forefront of digital payments?
Some countries are certainly leading the way in this movement. The top five countries by percentage of non cash payments are Belgium (93%), France (92%), Canada (90%), United Kingdom (89%), and Sweden (89%).
Asian nations are set to explode in this sphere too. South Korea is already in the top 10 and is quickly becoming almost entirely cashless. In China, purchasing is shifting from a mobile-first approach to ‘mobile-only’.
In 2015, more purchases were made on phones than computers and now it’s 64% in favour of mobile.
Many innovations are happening in Asia to expedite the digital world. Seoul is home to Samsung and LG and will offer the first 5G network during the 2018 Winter Olympics, while Hong Kong’s Octopus card can be used to pay for public transport and in shops, restaurants and vending machines. China is also using Quick Response (QR) codes to great success, where they are now found next to almost every cash register.
Many of these nations could be 100% cashless as early as 2022.
How can your hotel be prepared for a cashless society?
As technology drives the digital revolution forward, it will also allow you to be prepared for the transition. There are three main ways you can ensure your hotel will thrive in a cashless industry.
1. Install a property management system
A PMS is fantastic for automating all the processes involved with collecting, storing, and communicating guest information. Once you connect it with your online payment system, it can offer and update all the relevant payment and reservation information guests need.
2. Use an online booking engine
If guests are booking online they need to pay online. Use a booking engine that allows direct payments from credit cards, debit cards, and payment gateways such as PayPal. It should also display rates in multiple currencies and integrate with your channel manager to allow for a completely seamless experience at your property.
3. Use loyalty points
Another alternative to cash is utilising a loyalty program that lets guests use points to make purchases. This will encourage guests to earn points by booking regularly at your hotel and by using your amenities as well as your restaurant and bar.