How Is Bitcoin Revolutionizing the Hospitality Industry?

Bitcoin has grown from being software for nerds to one of the most popular cryptocurrencies used by millions of people worldwide. Businesses across every sector have started using Bitcoin to their advantage.

The global hospitality industry has also turned to Bitcoin for streamlining payments across their online and offline channels. If you are a hotelier or own a restaurant, enabling Bitcoin payments can significantly improve your customer experience. In this blog, we will explore Bitcoin, discover its benefits, and learn how you can start accepting Bitcoin with Speed. If that sounds exciting, let’s get going.

• The Tahini’s

Tahini’s is a popular restaurant chain in Canada that has been serving authentic Middle Eastern food since 2012. In August 2020, the company announced they would convert all of their cash reserves into Bitcoin.

Omar Hamam, the founder of Tahini’s, cited that Bitcoin “offers a much better alternative to saving cash.” In another tweet, he added, “For me I view #bitcoin as a true free savings technology that stores wealth across time and space.” They plan to accept Bitcoins “forever” as long as they don’t need fiat.

Switching all of their savings to Bitcoin played well for Tahini’s. In an interview with Insider, their chief marketing officer Aly revealed, “We’re up, to date, 460% on our initial investment and we didn’t stop there,” he added, “We will continue sweeping excess profit into bitcoins. We even bought the [April 2021 price] top and then rode it all the way down, and we just kept buying month after month after month. So it has worked like a charm for us,”.

• Okra — First-ever restaurant in Hong Kong to accept Bitcoin

Popular for its izakaya cuisine, Okra became one of the first restaurants to accept Bitcoin amid the COVID pandemic in 2021. As COVID was sprawling, restaurants were forced to limit their operating capacity to 50%. Poor business during the pandemic and heavy bank fees pushed Okra to accept Bitcoin and other cryptocurrencies.

In an interview with Retail in Asia, Max Levy, the owner and head chef, revealed, “Last year, as we watched our revenues dwindle to 25% of 2019 and 2018 levels, our costs were going up, as banks and credit card clearers raised their fees and percentages. With forced restaurant closures at night, we adopted a delivery model while we could not offer dine-in service. However, popular delivery companies that we tried charge 32% of the bill cost, and customers are always shocked to hear this as they are also charged a delivery fee and a service fee on top of their order. So our revenue had gone down and the amount of profit going into our bank also went down. We then saw the banks raise their fees. All of these fees were being attributed to “the cost of handling money”, but there has to be another way. So I strongly believe that cryptocurrency could well provide the answer through greater adoption.”

Customers paying via crypto received a 5% discount on their total bill, which was equivalent to standard processing fees imposed by credit card companies. The idea was ingenious and quickly gained traction. As a result, a large number of customers started paying in cryptocurrencies for their meals.

With this move, Okra managed to solve two major problems: inflation and high transaction fees — all this while boosting customer loyalty through discounts. Levy added, “The evolving world of digital currency and blockchain is something that will benefit not only our industry by saving us high transaction fees from banks and credit card processing companies, but it will soon become a much more beneficial way for our guests to pay.”

• The Chedi Andermatt

Located atop the Swiss Alps, approximately 1400 meters above sea level, The Chedi Andermatt is a luxurious five-star hotel featuring Asian-inspired elements, authentic hospitality, and classic European comfort.

In August 2021, the hotel announced they would start accepting Bitcoin to offer their customers flexible payment options. This move, amidst the COVID crisis, was welcomed by international tourists as it made payments quicker, simpler, and near-instant.

“We are making a clear statement to our hotel guests that we are open to new technologies and at the same time offer a new payment experience as an additional service,”

Jean-Yves Blatt, General Manager at the Chedi (Source: Bloomberg)

• Lower transaction fees

Banks and credit card companies charge up to 4% per transaction for processing payments. If you host travelers from overseas, an additional fee may be applicable on top of payment gateway charges. Thus, credit/debit card transactions not only cost more to process but also have longer settlement cycles.

Conversely, transaction processing fees for Bitcoin payments are 1% or less, whether it’s a global or local payment. Moreover, any transaction made via Blockchain is near-instant and practically anonymous, giving your customers maximum privacy and security.

• No PCI compliance needed

To accept credit card payments, you need a PCI compliance certificate — a mandatory authorization imposed by credit card companies to ensure all the companies process, store, or transmit credit card information securely and responsibly. To attain the compliance certificate, you must adhere to 12 key and 78 base requirements and pass 400 test procedures developed by the PCI Security Standards Council. Failing to comply with PCI can lead to penalties of up to $100,000 a month or even more.

As Bitcoin is a decentralized currency, no trusted party (bank or credit card company) is needed to authorize a transaction. Hence, no compliance is required either. Moreover, most Bitcoin payment processors, including Speed, don’t require KYC to send/receive payments. This allows both parties to transact anonymously without the interference of any intermediaries.

• Zero chargebacks

More than 80% of consumers file chargebacks out of convenience. Over the years, merchants have lost billions of dollars to chargebacks. If your chargeback ratio is close to 1% or more, credit card companies may levy several restrictions on your account or suspend it indefinitely. Many foreign processing companies charge as much as 7% to 10% or more per swipe if you are flagged as a ‘high-risk merchant.’

Bitcoin makes chargebacks absolutely obsolete. Once a transaction is confirmed, no one can alter/reverse it. This makes Bitcoin payments more secure and reliable than credit/debit card transactions.

• Simplify international payments

For international tourists, converting their local currencies and carrying around cash can be cumbersome. Moreover, the exchange rates across local forex brokers are unreasonably high. Most tourists have to exchange currencies multiple times while traveling internationally (while entering and leaving a country).

Unlike cash, Bitcoin works universally and does not incur any conversion fees. Thus, most tourists prefer Bitcoin while traveling internationally. And by enabling Bitcoin payments, you can offer a seamless onboarding experience for your international guests.

• Bitcoin is not just a currency but an investment, too

Bitcoin’s value has increased from just $1 in 2011 to $51,891 as of writing this. On the contrary, the purchasing power of the US dollar has declined by 96% since 1913. Bitcoin is not just a currency but a valuable asset that will grow exponentially over time.

Many investors hold Bitcoin as a hedge against inflation. The $10 you accept in Bitcoin today can be $100 tomorrow. Accepting Bitcoin will not just make you inflation-proof but also improve your cash flow by allowing you to spend your money without any oversight or restrictions.

➣ Online payments

Virtually collect payments from anywhere in real-time with Speed’s prebuilt payment solutions like:

• Payment Links: Collect Bitcoin payments through easily shareable links that can be accessed from anywhere. Send the link via email or social media applications to collect Bitcoin payments instantly.

• Checkout Page: Speed offers a pre-built checkout page that allows your customers to complete the payment in just a few clicks. Upon successful payment, you can redirect users to your desired page/website. You can also customize the look and feel of the checkout page via your dashboard.

➣ Offline payments

You can use Speed’s One QR and Lightning Wallet to collect payments across your offline outlets:

• One QR: Collect payments across your offline outlets via  Speed’s One QR — a static payment QR that users can scan to complete their payment through their preferred Bitcoin wallet. You can print the QR and add it across your offline outlets or share it via social media or email to collect payments.
  
• Wallet: With Speed Bitcoin Wallet, you can collect payments right from your smartphone with just a few taps. The Wallet supports both on-chain and Lightning Network transactions and is available for Android and iOS. All the transactions carried through Speed wallet do not incur any transaction fees whatsoever.
  

➣ Integrate Speed with your POS System

If you use a Point-of-Sale system for collecting payments, you can directly integrate Speed with it to accept Bitcoin payments. Our developer-friendly APIs allow you to connect Speed with any POS system easily and with minimal effort.

If you use a Content Management System like WordPress or Magento, we have pre-built extensions that you can use to start accepting payments via your website. All the plugins are developed while adhering to best coding practices and updated regularly to ensure they remain compatible with your CMS over time.