Although making money is the main aim in the hospitality business, it can be a hassle to handle. Counting out the pennies can be time-consuming, not to mention unhygienic, for waiting staff under pressure to get new staff to the table. Even credit cards need to be taken to the till to be swiped before being brought back to the table for the customer to sign. However, new technologies promise hospitality operators a cashless - even contact-less - way to be paid for their services.
According to Dave Birch, director of research firm Consult Hyperion, the acceptance of chip-and-PIN credit and debit cards points the way for the cashless transformation to come. "Now most people have a chip and PIN, the possibilities of cashless payments are growing," says Birch. "Vending machines and cigarette machines will not need change, so they will be cheaper to run and more convenient to the customers."
Beyond chip and PIN, a new generation of contact-less payment systems will enable customers to pay for goods and services by simply pressing a card near a reader, rather than swiping it or slotting it into a machine. Such a scheme has already been introduced by London Underground, whose Oyster Card system is used by about two million people.
Such contact-less systems could prove valuable in the hospitality environment, where food and drink can easily get into normal card readers. "The idea that you can pay for something by waving your wallet at it is very attractive for customers and business," says Birch. "Trials in the US have been very successful, and in the fast-food arena contact-less payment is not just quicker than credit cards, it is quicker than cash."
Even before contact-less credit cards become mainstream, hotels could issue guests with contact-less tags that could add drinks, food and vending items to the hotel bill, Birch says. Although such systems require upfront investment, they are cheaper to run than cash tills and cost less to maintain than other card readers because they have no moving parts.
Branches of McDonald's in the USA are already accepting contact-less payment cards from MasterCard, called PayPass. Cardholders simply tap or wave the card on, or near, a specially equipped terminal that uses a radio frequency chip to complete a payment transaction. McDonald's uses Verifone Omni 7000 card-readers to accept the new PayPass card, which will be available in Europe later this year.
Advances in cashless payment systems are also being made using mobile phone technology. Phone manufacturer Motorola is developing near-field communication (NFC) technology to enable its handsets to perform short-range payment, identification and communication with other devices. This technology is already being used in Japan as a contact-less payment system for goods and services. And Motorola plans to begin trials of NFC-enabled phones in the USA later this year incorporating the PayPass payment service.
In the near future, mobile phones and other portable devices will be equipped with a variety of short-range wireless technologies, including Bluetooth and Wi-Fi, that could handle secure cash payments. Not only would such developments save time and cost for operators and negate the need for customers to carry change for vending machines, they could result in the familiar ring of the till becoming a thing of the past.
Case study: Cater Link For education catering specialist Cater Link, the aim of using a cashless system was to help ensure that children eat nutritious meals. But the value of the system has already reached beyond this goal.
The company claims that the introduction of cashless smartcards into each new school is greeted with such enthusiasm that it regularly sees a 20% increase in sales. As well as generating additional revenue for the school and the caterer, increased numbers of children remain on site during the lunch period, contributing to reduced levels of lateness and even absenteeism following the lunch break.
Cater Link's managing director Tony McKenna says the system allows parents to retain control over how much lunch money children spend, and the reduction in time spent paying at the till makes life easier for both staff and children. Other benefits, such as reducing the risk of bullying for dinner money or the stigma associated with free school meals, were less predictable, he says.
Parents credit the payment cards either by cash or cheque, or the free school meal system issues a credit. Cards are presented at the till by the children and inserted into a reader. Each card holds information on the outstanding credit, products purchased, and any promotional points earned, as well as the child's name and details of any free meal entitlement.
Point of sale tills, loaded with software that identifies sales at the point of purchase, are linked to a PC that contains product and sales information. At the end of each day the PC downloads sales data from the till points and translates the information into reports. The average investment in technology to support the system is £8,000 for each school.
One school that uses Cater Link's cashless payment system is Mascalls comprehensive in Kent. "The switch to the cashless system in 2000 has really helped us to improve the service," says school manager Robin Holliday. "Vitally, the cards tie the children in to our facilities, helping us to provide greater numbers of our pupils with the best-quality food that encourages a healthy diet."
Case study: the Zetter London hotel the Zetter chose to put cashless vending machines that enable guests to charge items to their rooms on each of its four floors rather than put expensive minibars in its 59 bedrooms.
The vending machines stock a selection of alcoholic and soft drinks together with useful items such as toiletries and batteries. The payment mechanism is linked to the card-based room key system.
Software firm Quintus installed its EPnet system, which integrates the vending machines supplied by Apogee International with the Vingcard room card system and property management software from VisualOne Systems. Instead of fumbling for loose change, Zetter guests simply swipe their room card through the reader on the vending machine. The price is charged to the room and they pay at checkout.
Since all transactions are captured on a PC, this leaves a complete audit trail of sales, giving Zetter staff detailed reports on sales and the stock status in each machine. Such data is invaluable and facilitates key management decisions.
The Zetter uses the system in "credit-card mode", but EPnet can also be used like a debit card, where payment is deducted from a prepaid account.
Zetter general manager Justin Pinchbeck says: "We wished to provide a 24/7 service while avoiding the cost and traditional problems associated with in-room bars. Vending machines were the logical answer, but it was only because Quintus was able to integrate them with the hotel's systems that the idea became practical."