Worldwide use of electronic means of payment – for and against
About the Author:
Ralf Gladis is founder & CEO of the international payment service provider Computopfrom Bamberg. The payment expert is responsible in particular for international expansion and strategic alignment. The product range of the internationally active payment service provider includes e- and m-commerce, mail order and point of sale solutions. Paygate, the payment platform developed in-house, offers integrated payment processes and fraud prevention with over 350 payment methods and acquirer banks worldwide.
Question hotel objects:
As an e-payment provider, where do you see the value or importance of cryptocurrencies as a means of payment in the hotel industry?
Answer Ralf Gladis:
Cryptocurrencies, first and foremost Bitcoin, were born out of the idea of creating a currency that is independent of national borders and regulation by central banks. But for a currency to be accepted by society, it needs trust from a broad base. No cryptocurrencyhas yet reached this level. Due to the strong price fluctuations, however, they are quite popular among investors willing to take risks as a speculative object. However, this does not yet make them a useful secondary currency for the hotel industry. At the moment, the number of guests who own Bitcoin or Ether is simply still too small in relation to the total number of potential customers. And the fact that they own them does not yet mean that they also want to pay with them.
Question hotel objects:
What opportunities and risks do you see for hoteliers to use cryptocurrencies as a means of payment?
Answer Rolf Gladis:
The obvious risk is, of course, loss of value. In the hotel business, where margins are often low, a 5% slide in the share price would be enough to make the booking unprofitable. The expense is also often overlooked. For all the enthusiasm for the technical concept of a Bitcoin, people tend to forget that it is not just another payment method. Payments received by merchants in cryptocurrency have to be converted into euro book money in the same way as bills and coins in bricks-and-mortar retail – as long as there is no parallel network of Bitcoin acceptance points. VAT must be paid in euros, and even most suppliers only deliver against local currency. At most, an opportunity lies in winning very special target groups.
Question hotel objects:
What does channel-independent payment solution mean for international hotels?
Answer Rolf Gladis:
With cross-channel payment options, hotels can better aggregate and evaluate their guests’ transactions. Properties that process online and offline payments separately can typically only allocate revenue from food and beverage when the bill is posted to the room. With true omnichannel payments, on the other hand, which are transferred via a single payment platform, card transactions from the restaurant or in-house store can also be linked to the guest account. This provides a holistic picture of guest revenue. On an international level, this also works with local payment methods such as debit cards or wallets, naturally in all currencies. Loyalty cards can also be included in the evaluation.
For mid-range hotels, the topic of vending machine business should also not be disregarded; these payments can also be included in the overall evaluation at Computop.
Question hotel objects:
What cross-channel services and contactless payment options do you offer?
Answer Rolf Gladis:
Computop’s various cross-channel services play a particularly important role in retail, where a wide range of payment methods can be offered online. In online business, hotels currently still predominantly use the credit card for booking, due to its practical authorization function. In the hotel itself, contactless payment with the card or smartphone wallet should already be standard today, because it is faster and more hygienic. It is also safer to use, as Computop’s terminals support the smartphone authentication method. In the longer term, the terminal will become obsolete when payment is transmitted directly from the checkout or booking system to the smartphone via an NFC signal.
Question hotel objects:
What does cost-saving payment solution mean to you in terms of the hotelier?
Answer Ralf Gladis:
Two cost groups play a role in digital payments: on the one hand, the system costs for terminal hardware or the connection to booking systems, and on the other hand, the costs of the transaction. The former will decline when terminals are replaced by NFC transmitters. The trend toward using smartphones or tablets to accept card payments can also have a cost-reducing effect if the devices are also used for other functions, for example order acceptance. In terms of transaction costs, the credit card with its transaction fees naturally comes into play. In the longer term, SEPA Request-to-Pay could offer a cost advantage because it is based on the lower-cost online transfers. But the implementation of the framework is still in its infancy at the moment, so it should not be counted on at the moment.
Question hotel objects:
Or rather, who receives commissions for transactions in cryptocurrencies?
Answer Ralf Gladis:
Cryptocurrencies are transferred directly between wallets of the payer and the payee. These wallets are usually free of charge. However, commissions are incurred if the service also includes conversion into real currencies. The crypto platform Coinbase, for example, charges a 1% transaction fee for corporate customers, and the conversion into real currencies is then free of charge. This is cheaper than usual credit card transactions, but crypto payments are always executed immediately and fully booking, functions like reservation and later booking can only be done via service providers for additional fees – and then the already mentioned exchange rate risk already takes effect again.
Question hotel objects:
The ECB has announced the digital euro – what significance will it have for the hotel industry?
Answer Ralf Gladis:
Unlike privately issued cryptocurrencies, digital central bank currencies (CBDCs) enjoy the same backing as their analog variants: the performance of the respective associated economic area and the trust of its population. The e-euro will be able to be exchanged 1:1 for analog euros at any time, therefore exchange rates will not diverge, the exchange rate risk of Bitcoin & Co is eliminated. Even stablecoins backed by a basket of national currencies cannot achieve this stability. Therefore, the digital central bank currencies that will exist in many regions of the world will be much faster to use in everyday life. In practice, the e-euro will also be managed in wallets. While the ECB could issue the currency directly, it has already announced that it will not bypass commercial banks in this regard, so a link to the checking account is likely. As with cryptos, the exchange of CDBC takes place commission-free from wallet to wallet in real time; reservations, creditworthiness inquiries and other services will become chargeable extra services.
