The evolution of payments in the Ho.Re.Ca. sector

According to recent estimates, the European tourism sector has almost returned to pre-Covid levels: in 2022, in fact, the total number of nights spent in accommodation facilities in EU Countries amounted to over 2.72 billion nights¹ (compared to 2.88 billion in 2019), while the total spending for food and beverage in Europe's five largest economies (France, Germany, Italy, the United Kingdom and Spain) exceeded €308 billion between May 2022 and May 2023², in line with 2019 spending.

If, on the one hand, this recovery is strongly linked to the end of the pandemic restrictions; on the other hand, it is interesting to underscore how, over the last few years, many operators within the sector have quickly adapted to new market needs, digitising their activities and improving the overall user experience of end clients. How? For example, by reducing the risk of unsuccessful payments and offering an increasing number of alternative payment methods.

What are the main solutions companies operating in the catering and hospitality sectors can rely on to remain competitive in an increasingly digital and open market?

Open Banking Solutions for Payment Management in Hospitality

Whether it's travel, hospitality, or dining, the customer experience is fundamental in the Ho.Re.Ca. sector. Since this is a customer-centric industry, the customer journey is crucial at every stage of the relationship, including the purchase moment. Thus, payment management, both in the checkout process offered to customers and in the internal organisation of cash flows, can make a significant difference to business success.

Thanks to regulatory innovations introduced by PSD2, services once reserved for banking entities are now available to businesses through Third Party Providers. This offers new valuable solutions to improve payment management in the Ho.Re.Ca. sector and increase market appeal through services that optimise customer experience:

• Account Aggregation Services (AIS) to Reconcile Bookings and Payments: An AIS license from a provider like Fabrick allows automatic linking of hotel bookings to the receipts in the facility's bank accounts. This automated process minimises human error, makes back-office activities more efficient, and shows the payment status in real-time.
• Payment Initiation Services (PIS) to Offer Payments via Bank Transfer: Bank transfers are ideal for high-value purchases as they prevent going over the customer's credit card limit. The PIS license allows pre-filled bank transfer payments, eliminating the risk of input errors and simplifying the reconciliation of receipts thanks to merchant-specified payment reasons. Additionally, combining this option with a Pay by Link process allows customers to complete purchases and bookings in just a few clicks.
• API-Based Solutions for Managing Recurring Payments: Businesses that accept recurring payments can integrate API-based solutions to set up digital mandates and manage SEPA direct debits. This eliminates the need for a banking license and offers reduced credit times, greater payment transparency, and competitive costs.

Payment Orchestration for the Ho.Re.Ca. Sector

In addition to the added value services available thanks to PSD2, Ho.Re.Ca. operators operating in multiple international markets need a centralised infrastructure to manage every phase of the payment process while integrating solutions that can accelerate market entry and reduce time to market. In this sense, payment orchestration platforms can be the ideal solution for Ho.Re.Ca. operators. With these tools, it is possible to:

• Offer a wide range of payment methods to end customers
• Maximise the conversion rate at checkout
• Contain costs and simplify management

Are you a Ho.Re.Ca. operator? Discover the Fabrick solutions designed for the sector.