Event Payments: How Open Banking Improves Security, Speed and Guest Satisfaction

Guest post by Donal McGuinness CEO of Prommt

For hotels, hosting events like weddings and conferences goes beyond providing a venue. It involves orchestrating a symphony of services while ensuring every transaction is as smooth as the occasion itself. This is no easy feat, especially as the hospitality industry navigates a challenging landscape marked by rising operational costs. Inflation, supply chain disruptions, and high energy prices are affecting everything from utility bills to food supplies. Additionally, staffing shortages and competitive wages are driving up expenses.

Compounding these issues is the surge in card-not-present fraud, phishing attacks and chargebacks, which pose significant threats to the reputation and financial stability of hotels. Recent studies reveal that nearly one-third of hotels reported a data breach in 2023, with 89 percent experiencing multiple breaches within the year. The average cost of a breach in the industry is approximately $3.4 million USD.

Adding to these challenges are rising guest expectations. Today’s guests seek premium experiences, and expect convenience and personalisation to extend to payments. They desire smooth, frictionless and ‘invisible’ payment processes that operate seamlessly in the background. Consider the frustration of delayed payments causing last-minute stress or the security risks of handling sensitive financial information manually. These challenges impact operational efficiency and influence overall guest satisfaction – areas where hotels strive to excel.

Enter open banking, a game-changer for high-value event payments. It eliminates the hassle of card limits and costly processing fees and offers a safer, faster, and more cost-effective alternative to manual bank transfers, drafts or cheques.

Maximise Cost-Efficiencies with Payment Orchestration

Offering diverse payment options like open banking drives significant cost savings, convenience and flexibility. With smart payment orchestration controls, hotels can set rules to automatically choose the best payment method – card or bank – based on factors like value, location or transaction type. As an example value threshold, payments over €2,500 can default to open banking, while transactions below that threshold can offer card payments or indeed both.

This strategy helps hotels save on transaction fees and operational costs by giving a really high conversion rate. Open banking eliminates card fees and minimises the risks of costly chargebacks, fraud and data breaches. It is the perfect fit for large events, conferences and weddings. Additionally, hotels can boost payment success rates by setting up automated chase paths for failed transactions and presenting alternative payment options.

Streamline Collection with Faster Payments

Traditional payment methods like manual bank transfers are slow and costly. Hotels usually  share their bank details in a PDF, requiring guests to manually set them up as payees. This process involves multiple authentication steps, and the headache of carefully entering lengthy account numbers. With high-value payments, transaction typos can be a nightmare.

Open banking payments eliminate the stress of mistyping account details and losing money. Guests enjoy a quick, secure and seamless payment process directly from their bank accounts. Authentication happens through their banking app, with personal data encrypted and protected by industry-standard security measures. This keeps sensitive payment information hidden from fraudsters, enhancing security. Unlike direct debits, where payments are pulled by the merchant, open banking allows guests to initiate payments themselves, giving them greater control.

Advanced pay-by-link solutions streamline invoicing, enabling hotels to send branded payment requests directly to guests, thereby expediting bill settlements. With preset payee information, payments can be securely authenticated with just a few taps, greatly improving the accounts receivable process. Furthermore, with SEPA Instant coming soon and Faster Payments in the UK already well established, open banking facilitates immediate transfers and real-time notifications, accelerating service delivery.

Minimise Fraud and Ensure Data Compliance

Open banking payments significantly reduce the risks of fraud, chargebacks and data breaches. All providers of open banking solutions must uphold stringent security standards to protect guest data. This technology ensures safety by using bank-developed API endpoints, which are essential for verifying account information and facilitating transactions. Recent studies project a 61% reduction in fraud this year, thanks to advanced encryption and real-time authentication from open banking APIs. Originally created for online banking, open banking has evolved significantly through substantial investments in security enhancements. These advancements form the foundation of modern open banking technology.

Improve Operations with Integrated Payment Solutions

Many hotels are integrating their Property Management Systems (PMS) with smart payment technology platforms to request and collect payments easily, quickly, and securely. This seamless integration enables hotels to send payment requests for events directly from the PMS, dispatching them via email, SMS, or a paylink within a chat app. Payment statuses update automatically in the PMS, and hotel staff receive notifications as soon as payments are processed. This automation eliminates tedious tasks like copying and pasting guest details, and manually updating payment statuses. The streamlined process saves time and reduces payment administration, making it easier to collect advance payments and reduce late cancellations and no-shows.

Smart paytech solutions also empower hotels to create personalised payment plans and easily manage scheduled payments, making them ideal for recurring or seasonal events and on-site facilities like golf resorts and fitness centres. This capability significantly reduces the potential for human error and frees up valuable staff time. Real-time alerts keep key staff informed of payment activity, while robust reporting features simplify reconciliation. Hotels can stay proactive with automated reminders and refunds, all managed through an intuitive dashboard that provides live updates and detailed insights.

In summary, open banking transforms event payments with automation and enhanced security by saving time, cutting transaction fees, and lowering operational costs. It reduces fraud and data risks, while exceeding guest expectations for seamless transactions.

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