How can payments help hotels overcome fragmentation to deliver better guest experiences? Q&A with Tobias Caesari, Planet’s SVP Global Enterprise

We help retailers and hospitality companies to accept and process payments across the world, supporting 800k merchants to process payments from guests and shoppers across more than 120 countries. We’re hospitality specialists, providing gateway, acquiring services, currency conversion and tokenization solutions tailored to the needs of the industry, for both e-Commerce and on-property payments.

It’s no secret that the hospitality industry is fragmented. Franchisee ownership structures have led to decentralized decision making and a plethora of different systems at properties representing the same brand. So property A might use a different payment management system (PMS), different F&B system, different digital ordering system, and may work with different payments providers than all other properties in the same chain. Due to their regulated nature, payments tend to be contracted by the local entity or franchisee, rather than the brand.

For guests it means the experience offered at one property can vary significantly from another in the same group, which can be frustrating. Imagine paying for a stay with a digital wallet like ApplePay at one property but not being able to do the same when you travel next time. Perhaps property A can remember your payment details so you can leave without a formal check-out process, but property B can’t. You might even inadvertently leave property B without paying. 

I don’t think any large brand in hospitality has fully solved the issue yet, it’s a big task, but progress is being made and a variety of approaches are being tried. Some chains are opting for full centralization, where the brand specifies the payment and technology providers its properties will use and franchisees are mandated to comply. But this can impact franchisee relationships, perhaps where long term supplier relationships exist or the franchisee ends up paying more for the centralized option. There are also technology approaches that deliver consistency without needing a complete overhaul of systems.

One of the most interesting options is tokenization. This technology replaces a guest’s card details with a token. This helps hotel chains to reduce the PCI-DSS compliance burden by limiting instances where the guest’s sensitive payments information is handled. It also allows a chain to work more confidently with local acquirers around the world by introducing them to the secure tokenization flow.

Perhaps even more interestingly, the token created at time of booking can be passed to the property’s downstream systems (F&B, PMS etc) so payments can be frictionless throughout the stay, without the need to overhaul complex legacy systems.

At Planet we’ve already delivered invisible payment experiences for private members clubs and luxury brands, where guests tend to be well-known and high levels of service are a real priority. This means members or guests of the club can arrive, have a meal and leave without needing to pay the bill – it happens automatically behind-the-scenes. Although we’re starting with luxury brands and hospitality loyalty schemes, I’m confident this invisible experience will become widespread in the years ahead.

It’s one of the biggest trends in payments and it’s front and center for the industry. Guests increasingly want to pay with local methods or digital wallets, and while cards will always be important, no chain can afford to ignore alternative methods. We help hospitality companies accept 55 alternative payment methods and we’ve done work to customize this for the sector. For example, we’ve helped hotels with custom acceptance of PayPal and we can also issue and redeem branded gift cards, routing the funds to the correct property when redeemed.

With payment methods and routes becoming more diverse, orchestration emerges as a natural next step for many merchants. In hospitality though I do see some confusion about the term. Orchestration is much more than a platform that links to different acquirers, and perhaps routes payments based on the location of the IP address. For me, true orchestration means real-time decision making about how each transaction can best be handled based on a range of pre-determined criteria. It’s certainly relevant for hospitality and strong orchestration is about harnessing data to improve the quality of those decisions.

At Planet we recognize that if we’re going to deliver invisible payment experiences then suppliers to hotel chains need to collaborate. We’ve worked closely with Outpayce for several years and hotels using its Xchange Payments Platform (XPP) can access everything Planet has to offer easily via the platform. So that's local acquiring in markets around the world, acceptance of 55 alternative payment methods, currency conversion services and our tokenization solution. Increasingly our hospitality customers are bringing suppliers together around common objectives and that’s great to see - collaboration is key to overcoming fragmentation in the sector.