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Hospitality struggles to keep up when it comes to adopting new technology

24 October 2014
Hospitality struggles to keep up when it comes to adopting new technology

While the world moves on to contactless payments using mobile phones, some operators are still dealing only in cash, says Peter Ducker

If you are an Oyster cardholder you will have recently received an email from Transport for London encouraging you to use your contactless-enabled debit card instead of your Oyster card from now on.

This is a sure sign that contactless payment is finally going mainstream. We will be using the same card to travel and buy everyday items and our lunch. The need to use a separate Oyster card and top it up inside stations will ultimately become obsolete.

The weakness of the system, which persists today, has been the lack of security. If you mislay your Oyster card or contactless debit card, anyone can pick it up and use it before you realise it is missing and cancel it. This is the reason there is a £20 transaction limit and the banks absorb the risk on behalf of both the user and the business.

But payment with a mobile phone will become the safer, next generation of contactless payment. Transactions would be authorised with a thumbprint or by entering a pin and are secure and have no limit.

Mobile payment also points to a time when the physical cards themselves - and the security risks they inherently carry - will be unnecessary. Debit and credit card information will be simply stored in a phone, and if the phone is lost or stolen, it is much easier to replace virtual information than mail out new cards.

Hospitality does not have a very good record when it comes to investing in new technology. In fact, nearly one fifth of hospitality businesses do not even accept card payments. According to a survey of Institute of Hospitality members by Chip & Pin Solutions, 19% are cash-only businesses.

Although everyone has the right to run their business as they see fit, not accepting widespread methods of payment does not make commercial sense - you are simply limiting the ability of your guests to spend money. Yes, there is some commission to pay with cards, but this is more than compensated for by the increased turnover.

As mobile and contactless payment become more prevalent, there is a danger that some businesses will get left behind. New payment technology is particularly suitable or small and entrepreneurial businesses because it eliminates the need for expensive card terminals or point-of-sale systems.

If you run a market stall, a mobile food van, a small restaurant or a B&B, you can simply buy a device that plugs into your phone or tablet and allows you to take card payments. It really does pay to keep up with the latest technology.

Peter Ducker is chief executive of the Institute of Hospitality

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