Industry Going Mobile – But Don’t Forget Data Security

How Mobile Technology is Changing the Face of the Hospitality Industry

For anyone wondering if consumers are embracing mobile technology in relation to the hospitality industry, one just needs to look at the following stats:

  • 29 percent, and rising, of U.S. mobile subscribers over the age of 18 have booked hotel stays on their smartphones, according to comScore Inc.’s September 2011 Custom Mobile Retail Advisor Survey.
  • During the 2011 holiday season, more than 67 percent of consumers planned to make a purchase using a mobile device, according to PayPal.
  • And the number of users is growing as mobile payments are expected to grow 40 percent, reaching $670 billion in transactions and 2.5 billion users globally by 2015, according to Juniper Research.

Mobile Technology Today

Hotels are recognizing the increased consumer interest in mobile technology and are delivering to their guests in several ways.

In addition to mobile optimized web sites and click-to-call reservations for easier booking, hotels are now instituting mobile check-in, event or discount promotions, communications with loyalty rewards members, spa appointments and golf tee times via smartphones and tablets.

This is all being done in an effort to reach today’s plugged-in consumer, who are increasingly expecting these types of services.

Mobile Technology in the Future
Some of the most popular ideas that have recently come out of industry tradeshows combine mobile with traditional services. Ideas such as mobile check-in and complete point-of-sale (POS)/property management system (PMS) mobile integration for reservations, as well as mobile concierge and mobile payments for room service and at vending machines, laundry facilities, business centers, parking and other self-service areas, will streamline traditional processes and increase operational efficiency.

Looking further ahead, the mobile technology developments peaking industry interest are near-field communication (NFC) and e-wallets.  Why? Because of the role NFC can play in the elimination of the ubiquitous hotel room key while spurring the movement to e-wallets.

Participants of a recent NFC trial in Sweden used their phones to enter their hotel rooms after downloading the digital “door keys.” It was so successful that nearly all participants said they would use the service should it become available.

But NFC is not just for keys.

It can also enable guests to pay for a variety of hotel services using their phones, thus further eliminating the need for actual wallets. With e-wallets, consumers can simply wave their phones near a POS device to initiate a payment instead of using plastic magnetic stripe cards or cash. E-wallets would also provide hotels with other options to offer guests targeted discounts, promotions and mobile gift cards based on purchasing behavior.

Don’t Forget Security
In all the excitement about what mobile technology can do for the industry, one major consideration remains – how secure is it?

As the most attacked industry by cyber criminals, according to the Verizon Business 2011 Data Breach Investigations Report, that is the main question everyone in the hospitality industry should be asking.

Interestingly, mobile transactions are more secure than traditional magnetic stripe cards, which, if used at unsecure POS terminals, can make sensitive data from magnetic stripe cards easily susceptible to interception by cyber criminals. In the course of adopting and integrating mobile technology, the hospitality industry must take the necessary steps to protect their guests’ data.

One example of a security measure for mobile technologies is tokenization – a technique that replaces the sensitive cardholder data obtained during a card transaction with a token instead of the full 16-digit account number.

While mobile security requires that all parties (carriers, consumers and merchants) do their part to keep data secure, as a best practice, hoteliers should implement end-to-end encryption with a multi-use tokenization service to ensure no sensitive cardholder data is stored on their POS or PMS.

A Look Ahead
This is an exciting time in the hospitality industry as there is no doubt that mobile technology will continue to play an important role. After all, it enhances the guest experience, streamlines operations and generates additional revenue.

Many industry experts agree NFC-based technologies will reign supreme, but the ultimate success of mobile hospitality technologies will be determined by industry standards, large-scale implementations, and merchant and consumer acceptance.


Mike English is the executive director, New Product Development, for Heartland Payment Systems® ― the nation’s fifth largest payments processor and the official preferred provider of card processing, gift marketing, payroll and tip management services for the American Hotel & Lodging Association and 39 state lodging associations. To learn more, visit www.heartlandpaymentsystems.com/lodging.

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