Long-Term Safety, Mobile Wallets Will Boost Post-Pandemic Cross Border Travel

The optimism in the travel industry is tangible but still tentative. Vaccines are being deployed. Vaccine passports are gaining traction. The pandemic, it seems, is on the ropes.

All that’s missing are the travelers. There are signs they will come back quickly, as will their spending. And when they do, they will also bring digital-first behaviors that were developed in part for safety and convenience. Perhaps the most important one is contactless payments. And in this age of contactless commerce, Chuck Huang, CEO of mobile wallet payment provider Citcon, told Karen Webster that QR codes will see a wide embrace.

Against that backdrop, Citcon said earlier this month that it struck a pact with Agilysys to enable global hospitality providers’ customers to access mobile wallet solutions — across the globe. In broad strokes, Citcon offers a slew of wallet brands, spanning PayPal, Venmo, WeChat Pay and others, and the firm notes that it is the only fully licensed U.S.-based acquirer of Alipay, WeChat Pay and China UnionPay.

That cross-border U.S.-China functionality is especially important, noted Huang, in a world where hospitality providers are gearing up for (and one might think, fervently hoping for) a rebound in tourism, where Chinese consumers open their (digital) wallets in far-flung locales. Embedding QR codes into hospitality software may be a tailwind to that spending. As noted in the February QR Code Payments Tracker, done in collaboration between PYMNTS and Citcon, 74 percent of Chinese consumers make mobile payments daily, and QR codes are leveraged for a staggering 95 percent of these transactions.

The ripple effect will be palpable. Spending, done digitally at hotels will likely spur the use of digital wallets at other local merchants. Citcon has noted that less than 10 percent of Asian transactions occur with credit cards. So, the stage is set for global merchants to grow their business in the mobile commerce age — particularly with younger, tech-savvy consumers for whom Venmo and PayPal are verbs.

So, if ground zero is the hotel itself, the question stands: Are the hotels ready?

“Right now, certainly, the industry is preparing for the reopening, and they are expecting the return of these international consumers,” said Huang.

Once the pandemic is over, he said, Citcon and Agilysys expect to see international cross-border movement, with particular emphasis on inflow into the U.S.

International consumers — particularly Chinese consumers — said Huang, are already incentivized to use digital payment methods. The consumer who is traveling cross-border might come armed with a credit card (or several), but they may be hesitant to use them except in case of emergency (due to fees and interest charges).

Chinese tourists may be unsure if their cards will work at international locations at all. And, there’s a growing familiarity with the “pays” — Alipay, WeChat and other wallets. These users find the QR code convenient to use in a hospitality setting, tied to everything from check-in to ordering room service (no need for scanning the paper menus) to checking out.

“If I have a wallet, which is what I use every day back in China — and it will work [in the U.S.], that will certainly make me more comfortable,” noted Huang.

BNPL Too

Buy now, pay later (BNPL) options have seen phenomenal growth on the efforts of companies like Klarna and Afterpay. Huang noted that Citcon/Agilysys has been working with Klarna on these options and has been developing a pipeline with other companies.

Citcon and Agilysys are providing the technical heavy lifting for the hospitality firms and payments diversification for merchants, with back-end integration and at the point of sale (POS), he said.

As for the ripple effect: Hotels can act as an “anchor” to the continuum of omnichannel commerce that spans a trip. One might liken hotels to the anchor stores in malls — the huge marquee names that attract foot traffic.

In this way, the shops, stores and restaurants proximate to a hotel could activate QR code payments, too — eventually folding loyalty promotions (via the QR software) into the context of the omnichannel experience to keep foot traffic and spending flowing.

“That’s exactly our strategy, and it was the same two years ago,” said Huang. “Certainly, it was impacted by the pandemic, but that strategy is always there.”

As he told Webster, “Once the international travelers and the younger generations use a QR code [to check in or out of hotels], the behavior is top of mind.”