Wave goodbye to your wallet, chuck out your change, cut up your credit cards. But, before you do all that, make sure you keep your mobile phone.
Why? Because, in the future your mobile device may be how you pay your way via your ‘mobile wallet’. For the hospitality industry this includes hotel rooms, room service and all sorts of ancillary services from spa treatments to cabs to and from the airport.
NB: This is a viewpoint by Richard Pemberton, ICT director - Best Western Hotels GB and advisory board member, Hospitality Technology Europe.
To put it simply, mobile payment transactions using mobile wallets have exploded.
According to Gartner research, mobile wallet payments were roughly $171.5bn in 2012, a 62% rise from $105.9 billion in 2011. In 2012, roughly 212 million people worldwide made mobile payments, up 32% from nearly 160 million users in 2011.
The leaders when it comes to facilitating mobile wallet technology are the retailers, with companies like Starbucks and McDonald’s already building in capabilities in response to customer demand.
It’s time for hoteliers to sit up and take notice. Gartner also states that it expects mobile transactions to be worth more than $600bn with more global users than there are people living in the USA by 2016.
The growing importance of mobiles (and the release of 4G) is not something that hoteliers are choosing to ignore. Most hoteliers will tell you that while mobile is the channel experiencing the greatest increase for browsing, the challenge is converting browsers to bookers.
Making mobile wallets work for the hospitality industry is a two way street – customers need to have confidence in mobile payment systems and hoteliers need to make payment processes simpler.
The good news is that mainstream payment methods from brands like Google (Wallet), Barclay’s (Pingit) and PayPal have already signed up tens of millions of users. It is also worth noting that WEVE (a collaboration between EE, O2 and Vodafone) is planning to launch a mobile wallet. Apple’s Passbook should not be ruled out either.
The next step for hoteliers is to address mcommerce and make their websites more mobile payment friendly.
However, it is important that existing systems are not just mobile-enabled – a mobile strategy needs fresh thought particularly when considering privacy and security.
Interestingly, Gartner research states 60% of companies will have no mobile strategy in 2014, a statistic I hope will improve as awareness levels grow, particularly of the commercial benefits.
Once they have taken this crucial step, hoteliers will be able to integrate their services and market anything from restaurant deals to exclusive spa promotions direct to guests.
Mobile payments can also be linked with back-office tools such as a hotel’s property management system (PMS) or customer relationship management (CRM) system, allowing hoteliers to see what preferences guests have and be much more tailored in terms of what they offer.
Only a few hoteliers who have achieved this level of success, however, it is on the horizon for many. Whether mobile wallets will become as ubiquitous as credit cards in a few years is yet to be determined.
But as we move into 2014 it will be interesting to see where customers place their bets, and how hoteliers will take advantage of the new technology.
Next year’s Hospitality Technology Europe hopes to address these challenges from both a commercial and a technological point of view.
NB: This is a viewpoint by Richard Pemberton, ICT director - Best Western Hotels GB and advisory board member, Hospitality Technology Europe.
NB 2: Mobile payment image via Shutterstock.