Johannesburg, Monday, 6 May 2024 – In South Africa, where small and independent accommodations form the bulk of the hospitality market, the barriers to adopting traditional payment systems are notably high. The local market faces unique challenges, such as fluctuating exchange rates and high fees for international transactions. Fintech solutions that cater specifically to these needs are not just beneficial but essential.
What started as a solution to a problem for our clients has grown into a fully-fledged payment processing service, propelling us into the fintech space. Back in 2008, small, independent guesthouses and B&Bs were excluded from the online travel booking space due to the prohibitive costs of merchant accounts. To list your property on a site like Booking.com, you needed a way to process payments, and for many, a processing fee as high as 6% (at the time) was a steep barrier.
Creating a solution didn’t come without challenges. We had to tackle the complexities of online bookings and payment checkouts, ensure security, manage the distribution of payments to multiple suppliers, and juggle costs to make the product affordable to our clients. We set out to integrate online bookings, payments, and automation straight into our clients’ front desks, from booking to checkout.
Fast forward to the present, and we’ve reached a 20th-anniversary milestone with more than 10,000 clients using NightsBridge and processing over 900,000 transactions in the past 12 months.
The results for clients have been transformative. The convenience and improved conversion rates are just the tip of the iceberg. We’ve ensured that our clients can book and have their guests pay with confidence. For guests, the booking process, often done on mobile phones from the comfort of their couches, has become smoother. For our clients, the payment process is integrated into their daily workflow, making transactions transparent and manageable.
As hospitality in South Africa continues to evolve, property owners must stay informed and adapt to the changing payment ecosystem. By embracing fintech solutions, mobile-first payment options, virtual cards, and transparent pricing models, they can position their businesses for success and deliver a seamless, secure, and satisfying experience for their guests.
Here are five important payment trends small hospitality establishments need to be aware of to stay ahead of the curve:
1. Importance of Mobile and Contactless Payment Adoption
One innovation that leap-frogged during the pandemic was contactless processing, which has now evolved into guests being able to check out from their room via their mobile devices. This move towards mobile-first payment solutions has streamlined operations significantly. It’s a no-brainer considering how travellers live on their mobile devices.
2. The Growing Role of Virtual Cards
Virtual cards hold particular importance for the South African market due to the ease and security they offer. Given the concerns about fraud and high rates of financial scams in the country, virtual cards provide a secure method of transaction that protects both the business and the customer. They ensure that funds are allocated before services are rendered, reducing the risk of chargebacks and fraud, which are a significant concern for local hospitality operators.
I’m particularly proud of our approach to virtual cards. With misconceptions abounding, it’s crucial to understand that in our industry, these cards are pre-loaded with funds, making them secure and reliable for transactions. We’ve taken the pain out of the administration involved in deducting virtual cards set to activate on guest arrival by automating what was once a manual and laborious task for guesthouse owners.
3. Understand Transaction Fees
Understanding the ‘layer cake’ of fees associated with payment processing for South African hospitality businesses is particularly crucial due to the higher costs typically associated with banking services in the region. Each transaction can attract a myriad of fees, more so for international cards, which are common with tourists visiting from abroad. Understanding these costs to compare actual charges when shopping for a payment provider is a crucial strategy for maintaining profitability.
4. Navigating Disbursement Complexities
Disbursement in the travel and hospitality sector can be likened to splitting a bill at a large dinner table—everyone has to get their correct share. As a property owner, you’re a crucial stakeholder in a complex chain that may include travel agents, tour operators, online travel agencies (OTAs), and other entities. Our industry-wide payment solutions have simplified this process, especially in the corporate travel market, relieving pain points for agents and accommodation owners alike.
5. Leveraging Payment Technologies for Competitive Advantage
The strategic use of advanced payment technologies can be a significant competitive advantage, especially in a tourist-heavy market like South Africa. Offering a wide range of payment options in a professional manner, can enhance the customer experience and boost satisfaction. Furthermore, these technologies can help streamline operations, reduce errors, and free up valuable time that can be better spent on guest services or expanding the business.
If you can save just 30 minutes a day through automation, that accumulates to one and a half days per month – valuable time property owners could invest back into their business, guests, or even themselves.
This is an extract from a talk presented by Emerick, “Understanding the Payments Puzzle’ at Africa Travel Week 2024.
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Issued by: Big Ambitions
Media Enquiries: Roland Muller
Email: roland@bigambitions.co.za
About NightsBridge
NightsBridge is a technology company that links accommodation establishments to the websites that sell their room nights. We provide a bridge between properties and their potential guests, offering realtime availability across multiple booking sites and agents. Our solutions make it easy for accommodation owners to manage everything from bookings to invoicing and marketing. As a South African homegrown product, NightsBridge is recognised internationally as the largest inventory of bed-nights in Africa. In the market for 19 years, our world-class software is backed up by exceptional, local customer service, which has grown our client base to 10,000 properties in 41 countries.
For more information, visit http://www.nightsbridge.com
General Enquiries: Susan Smuts
Tel: +27 879 436 035
Email: susan@nightsbridge.co.za.
