It’s one of the hot new buzzwords in the business world today: Fintech, short for financial technology. From startups like Bitcoin to mobile wallets and virtual credit cards, it’s just one of many ways the digital revolution is transforming our lives.
But, as with many technological revolutions, it’s an area where the hospitality industry has lagged.
While many businesses threw away their fax machines years ago, many hotels still rely on them daily to receive credit card details for “card not present” advance payments or deposits. All it takes is one missed or jammed fax to create headaches and frustration for travelers, hotel workers and travel agencies alike.
There are an increasing number of options for hotels and travel sellers to shed the fax machine, while reducing their transaction costs and the associated bookkeeping nightmares. (Click here to access an in-depth discussion of the issue.)
Payments from mobile phones are one option for relaying credit-card transactions. They are also a great way for hotels to tie payments directly to both their point-of-sale systems and hotel loyalty program accounts.
There are, however, still concerns about fraud with mobile technologies, and consumer adoption has been slower than expected in many parts of the world. In addition, mobile payments are not yet applicable to business-to-business and large-batch transactions.
Some online travel agencies have also begun using PayPal to send advance payment to hotels. But PayPal also charges for commercial use, and guests still usually need a credit card when they check in to guarantee payments for incidentals.
Virtual credit cards are another alternative. They are more secure but still carry fees, and many hotel computer systems aren’t equipped to handle this new technology.
Alternative currencies like Bitcoin and the blockchain technology that supports them are still a bit too futuristic for many travelers. These virtual currency systems have the potential to revolutionize payments for suppliers, distributors and customers alike by disintermediating banks, processors, exchanges and clearinghouses that take a cut of every payment.
While there’s no question the digital payments revolution has begun, it still has a long way to go. Some technologies being touted today may not last, and many other new innovations are sure to come. My advice: Keep watching developments and look for the right place to jump in. The potential to improve your business by cutting costs and automating processes is enormous.
Have you adopted new forms of payment? Do you see opportunities to boost payment efficiency? Or do you fear new ideas could create new problems? Let us know your opinion. We would love to hear from you!
About the author
Mark Dubrow, the CEO of Onyx CenterSource, is a hospitality veteran with nearly 30 years’ experience in operations, financial management and business services. Onyx CenterSource focuses on helping its customers overcome payment challenges. In addition to collecting and facilitating hotel commission payments, they have developed a payment distribution system called PayRoute, which can be used by travel distributors and hotels alike to make payments to anyone, anytime, anywhere in the world.
Earlier in his career, Dubrow spent 13 years in various leadership roles with Marriott International at its headquarters in Bethesda, Maryland, and with extended-stay innovator Homestead Village, now part of Extended Stay America. Dubrow was honored with the 2015 Ernst & Young Entrepreneur of the Year Award in the Emerging Technology category for his accomplishments.
Dubrow, of Dallas, is an active contributor to Children’s International, a nonprofit humanitarian organization that supports children and prepares youth to escape poverty, and serves on the board of DHISCO Inc. He earned a bachelor’s degree in accounting at the University of Maryland University College, College Park, and a master of business administration degree with high honors at the University of Texas at El Paso.
