The hospitality industry faces challenges in achieving efficiency and security across a wide array of payments issues due to fragmented systems.
Many enterprise restaurant and hospitality brands rely on a patchwork of independent payment and point-of-sale systems to manage diverse payment options and currencies, all while trying to maintain data security. Despite merchants valuing integrated payment solutions, just 15% of all hospitality enterprises report having fully integrated payment system, according to a survey conducted by Toast and FreedomPay, which examined the primary payments challenges within hotels, resorts, and restaurants.
Respondents also highlighted how these fragmented systems affect customer experiences, leading to slow checkout times and guest frustration due to the inability to seamlessly integrate payments with other aspects of the customer journey.
The survey further revealed that disconnected systems are making it difficult for these businesses to get a comprehensive, end-to-end view of customer data. This limitation makes it challenging to analyze customer behavior, personalize experiences, or identify emerging trends.
Fraud and Acceptance Issues
The primary concern among hospitality executives surveyed is fraudulent payments, cited by 68% of respondents. The study notes that siloed payment systems can exacerbate this problem, leading to inconveniences for both employees and customers. Notably, the biggest concern cited related to payment security is the operational downtime caused by breaches, which are costly. A 2023 report from IBM found that the average data breach in the hospitality sector results in a $3.36 million expense.
Following fraud, the next major concern identified by over half of respondents was billing tracking. This is closely followed by the challenges associated with accepting multiple payment methods and currencies. The study underscores that the most important feature of payment processing and POS solutions is their capability to accommodate various types of payments.
That’s critical because travelers continue to use a wide variety of payment methods. A survey from Mastercard found that debit cards, credit cards, cash, rewards points, and PayPal are all used by roughly a third of travelers. Prepaid gift cards have also turned into a significant growth area for the travel industry. Separate data from Get Your Guide revealed that 92% of Millennials and Gen Zers would prefer to receive the gift of travel or an experience like a concert or sporting event, as opposed to material goods.