Before the pandemic, people would not necessarily have seen businesses within the hospitality sector as one that heavily relied on technology.
However, as the world came out of lockdown and returned to restaurants, customers’ behaviour changed and quickly adapted to using QR codes for everything from viewing menus to making their payments.
The hospitality industry has embraced these changes and the use of Open Banking has opened up a new world of payments opportunities. Here we are discussing how Open Banking can benefit the hospitality industry.
Faster and More Secure Payments
Open Banking allows for real-time payments without the need for intermediaries such as card networks or payment gateways. This can speed up transactions and reduce costs for hotels, restaurants and other hospitality businesses.
Personalised Customer Experiences
By leveraging customer data obtained through Open Banking APIs, hospitality businesses can gain a better understanding of their customers’ preferences and behaviour. This data can then be used to offer personalised services and experiences that meet their specific needs, resulting in increased customer loyalty and satisfaction.
Improved Cash Flow Management
The hospitality industry was one of the hardest hit industries during the pandemic and as a result, cash flow situations were dire for a lot of companies. Not only does Open Banking promise businesses to receive instantaneous payments, but the APIs used by Open Banking can also provide hospitality businesses with real-time access to their financial data, enabling them to manage their cash flow more efficiently. This can help businesses make better financial decisions, reduce costs and optimise their operations.
Easier to Manage Finances
As with a lot of small to medium-sized businesses, a lot of hospitality companies will not have the benefit of having someone full-time managing their finances or the option to outsource the job to anyone. So, having fewer financial admin tasks to deal with through using Open Banking saves them a lot of time and money on administration without sacrificing the visibility of their financial situation.
Enhanced Fraud Prevention
Open Banking APIs use advanced security protocols to protect against fraudulent transactions, such as identity theft and account takeover. This can help hospitality businesses reduce the risk of financial losses and reputational damage caused by fraudulent activities.
Streamlined Account and Reconciliation
Open Banking APIs can automate the process of accounting and reconciliation, reducing the time and resources required to manage financial transactions. This can help businesses reduce errors, improve accuracy and free up resources to focus on other areas of the business.
The traditional payment process used in many hospitality establishments is expensive and includes several middlemen and third parties. Payments made via Open Banking do not have this problem. They are made instantaneous, have significantly lower transaction fees compared to card payments and there is no risk of chargeback fees.
Overall, Open Banking has the potential to bring significant benefits to the hospitality industry, including improved customer experiences, streamlined operations, and increased profitability. With the costs of running a business set to continue to increase, this will continue to put pressure on businesses, including the hospitality industry. By embracing the opportunities Open Banking can provide, there are still ways to keep costs down whilst providing a streamlined payment process.