With the growth of digital payment tools such as mobile wallets and e-commerce, payment technology has revolutionized the auto rental industry like we’ve never seen before. New payment methods have provided many benefits to auto rental business owners who strive to offer greater convenience to their customers during the rental process. With the help of these new technologies, car rental business owners can attract new audiences while improving loyalty among existing customers.
A great way to reduce friction during the rental process while increasing convenience and customization is to give consumers multiple ways to pay. In this article, we’ll discuss how industry leaders can stay ahead of the curve and differentiate themselves from their competitors with the help of payment technology trends such as online or in-app bookings, mobile point-of-sale solutions, and unattended self-service kiosks.
2022 Payment Technology Trends
The car rental industry is leaving no stone unturned when it comes to adapting to customer expectations. With the introduction of new payment technology, small and large businesses alike have capitalized on innovative solutions to help drive their bottom line. Let’s take a look at the following payment trends driving higher growth opportunities in the car rental industry:
Online Booking Solutions
As e-commerce continues to skyrocket, car rental companies have embraced online booking systems in which customers can reserve their rental without physically entering the business and waiting in line. Customers have the convenience of booking in the comfort of their own homes while having access to more car options and details, such as mileage and features. In a world of smartphones, car rental users can truly benefit from reserving bookings online with just a mobile device.
Choosing a payment gateway that seamlessly integrates with your existing website is the key to running a successful online booking experience. Significantly, they enable businesses to accept a wide array of payment methods such as credit cards, mobile wallets, and ACH payments.
Mobile Wallet Processing
As smartphone capabilities continue to accommodate user payment preferences, we are seeing a major impact on the car rental industry. Both customers and businesses are reaping the benefits of mobile wallet use, as it has become increasingly popular for its convenience, ease of use, and security. In a recent survey, about 66% of respondents — or more than 98 million Americans — say they use digital wallets because they’re a more convenient option than carrying around dollar bills and credit cards. Mobile wallets are another secure and convenient payment option for customers to pay online and in-store. Users can simply tap or click their smartphone for safe and speedy checkout.
To help streamline the rental experience, a significant area that car rental businesses are tapping into is unattended retail devices. Self-service kiosks continue to grow in popularity, as customers appreciate their convenience, speed, and simplicity. With the presence of a kiosk, customers can skip the lines at the rental counter, choose from a reserved booking or on-demand rental, modify or review rental information, and pay on the spot with their preferred payment method—all with just a credit card and valid driver’s license. The market for self-service kiosks is expected to grow at a compound annual growth rate of 6.4% during 2021-2026. Beyond offering benefits to just consumers, self-service kiosks produce a multitude of added benefits for businesses, such as reducing the need for a physical worker, minimizing overhead costs, and streamlining data collection. Customers can easily book their vehicle and choose their preferred payment method without having to approach a physical store worker.
Advanced POS Hardware
Although online and mobile solutions are increasingly becoming fan favorites, on-site checkout has proven its high functionality and resilience to consumer demand. Taking payments with handheld devices allows merchants to enhance their mobility beyond the counter. Today’s auto rental businesses can choose from a wide range of sleek wireless devices, or they can even convert their smartphone into a mobile point of sale system with payment processing apps. Business owners can install a mobile POS app and pair it with a card reader to start taking instant payments from the palm of their hands. This is a great way for car rental companies to boost sales, reduce expenses, and conveniently accept and manage payments without the hassle of carrying a bulky device.
Recent data predicts that by 2025, QR codes will be used by 30% of all mobile users. Merchants can generate unique QR codes that can be displayed on POS devices and customer receipts. The customer then simply scans the QR code with their smartphone, and they are redirected to a custom online payment form with pre-filled fields. Car rental companies are increasingly utilizing this capability by placing a custom QR code on vehicles so that customers can scan the car of their choice and instantly pay on the spot.
Tap-on-phone technology is steadily becoming a favorite among merchants because it eliminates the need for a credit card terminal. It enables merchants to accept payments on their mobile device using near-field communication (NFC), eliminating the need for hardware — essentially, the smartphone becomes the POS device. Customers can tap to pay with their phone or contactless card over the merchant’s smartphone, just as they would against a regular terminal. This new technology provides a cost-effective and straightforward way to expedite the payment process in-store or at the curb. Auto rental providers can take fast and secure payments on the spot for easy car rental check-ins and check-outs.
Changing Consumer Demands
Traditionally, the car rental process for customers starts with walking over to the rental desk, speaking to a representative who manually enters credentials, and then choosing the desired car rental from a few selections on-site. This process can be lengthy as a result of waiting in long lines, filling out tedious paperwork, and recording payment information. Customers nowadays want something quick, simple, and hassle-free— thus enter payment technology.
Although we’ve witnessed significant milestones in technological advancements in the auto rental industry, we can expect the adoption of more payment innovations in the near future. For example, as contactless payments are becoming a preferred payment method, the introduction of hands-free payment trends will continue to climb. A survey from Mastercard found that 82% of shoppers view contactless shopping as a cleaner way to do transactions.
The payment processing landscape is rapidly evolving and aiding car rental businesses with uncharted growth opportunities. The key to staying ahead of the curve is choosing the right payment processor that will intuitively evolve and adapt to their current business model. Payment gateways provide many key benefits such as advanced security and customer-friendly payment features, which can give car rental companies a competitive edge in the constantly-shifting environment.
As these digital payment tools become more readily available, industry leaders will be sure to witness a positive correlation between implementing these technologies and the future success of their business.
About the Author: Mark Paley is the vice president of sales at Cardknox, a leading omnichannel payment gateway. Paley will be speaking at the 2022 International Car Rental Show, convening April 24-26 at Paris Las Vegas.