With small and independent accommodations facing significant cost barriers when trying to stay ahead of the technological curve, booking platform NightsBridge highlights five important payment trends that these establishments should pay attention to.
NightsBridge MD Theresa Emerick explains that, back in 2008, small, independent guesthouses and B&Bs were excluded from the online travel booking space due to the prohibitive costs of merchant accounts. Nightsbridge sought to create a solution to these challenges.
“We had to tackle the complexities of online bookings and payment check-outs, ensure security, manage the distribution of payments to multiple suppliers, and juggle costs to make the product affordable,” Emerick says.
She adds that with hospitality in South Africa continuing to evolve, property owners must stay informed and adapt to the changing payment ecosystem.
“By embracing fintech solutions, mobile-first payment options, virtual cards, and transparent pricing models, they can position their businesses for success and deliver a seamless, secure, and satisfying experience for their guests.”
She suggests the following five payment trends for small hospitality establishments to be aware of:
Mobile and contactless payment adoption
One innovation that leap-frogged during the pandemic was contactless processing, which has now evolved into guests being able to check out from their room via their mobile devices. This move towards mobile-first payment solutions has streamlined operations significantly.
“It’s a no-brainer considering how travellers live on their mobile devices,” Emerick says.
The growing role of virtual cards
Virtual cards hold particular importance for the South African market due to the ease and security they offer. Given the concerns about fraud and high rates of financial scams in the country, virtual cards provide a secure method of transaction that protects both the business and the customer. They ensure that funds are allocated before services are rendered, reducing the risk of chargebacks and fraud, which are a significant concern for local hospitality operators.
“I'm particularly proud of our approach to virtual cards. With misconceptions abounding, it's crucial to understand that in our industry, these cards are pre-loaded with funds, making them secure and reliable for transactions. We've taken the pain out of the administration involved in deducting virtual cards set to activate on guest arrival by automating what was once a manual and laborious task for guesthouse owners,” Emerick points out.
Understand transaction fees
Understanding the layers of fees associated with payment processing for South African hospitality businesses is particularly crucial due to the higher costs typically associated with banking services in the region.
“Each transaction can attract a myriad of fees, more so for international cards, which are common with tourists visiting from abroad. Understanding these costs to compare actual charges when shopping for a payment provider is a crucial strategy for maintaining profitability,” says Emerick.
Navigating disbursement complexities
“Disbursement in the travel and hospitality sector can be likened to splitting a bill at a large dinner table – everyone has to get their correct share,” she says.
Property owners are crucial stakeholders in a complex chain that may include travel agents, tour operators, online travel agencies, and other entities.
Leveraging payment technologies for competitive advantage
The strategic use of advanced payment technologies can be a significant competitive advantage, especially in a tourist-heavy market like South Africa.
“Offering a wide range of payment options in a professional manner can enhance the customer experience and boost satisfaction. Furthermore, these technologies can help streamline operations, reduce errors, and free up valuable time that can be better spent on guest services or expanding the business,” Emerick concludes.
