Dubai: After property deals and coffee purchases, hotel stays in the UAE could be the next big one for crypto payments. Whatever be the sector, cryptocurrencies could resolve some of the lag in payments experienced in other transactions – with the exception of cash, of course.
It helps that the crypto payments happen in almost in real-time unlike the those transacted using cards. At a time when businesses are keeping a close watch on their cashflow situations, (almost-) instant payments help.
Abhishek Jajoo, founding Partner and CEO of AJMS Global Network, said the local F&B sector is deeply impacted by the speed of cashflow turnaround. So, if any payment method comes up to speed up cash-in-hand, then there will be easier acceptance.
Card payments to delivery platforms take weeks to process and incur higher costs that compel F&B owners to consider options. And crypto payments is one such.
Here, blockchain technology comes to help as the speed of fund flow is instant and provides much higher security.
He cites the case of an F&B outlet powered by blockchain and cryptocurrency - bistroo is a direct-to-consumer F&B marketplace that "connects consumers directly to the restaurants and payments are received instantly instead of waiting for weeks. It is quite likely that F&B sector of the UAE will embrace this example."
Easier with refunds too
Bake N More, a café operator, offers crypto payments through Mixin Network, allowing customers to purchase their pastries or coffee using Bitcoin, Ethereum, Tether, Dogecoin, Litecoin, and Shiba Inu. "We are using an all-in-one cloud-based PoS (Point of Sale) that allows customers to choose from credit/debit card or crypto coin options,” said Mohammad Al Hammadi, the founder.
Customers who pay in crypto tokens are converted into dirhams with real-time prices, and they will get a tax invoice with 5 per cent VAT, similar to any cash invoice.
The cafe uses Mixpay system in the Mixin Network that directly converts the tokens in real-time. Al Hammadi said, "This system eliminates the issue with a wallet-to-wallet payment that doesn't have a record. This becomes essential if customer money has to be refunded. In our case, if any customer requires a refund, he will be paid back in dirhams as per the invoice value."
According to a recent survey by Oracle, only 6 per cent of UAE’s F&B patrons are willing to adopt payments in crypto to pay at the restaurants or delivery orders. And 36 per cent of the respondent restaurants prefer contactless payments such as ApplePay or GooglePay.
"This 36 per cent segment, preferring contactless payment, has a higher chance of adopting cryptos as an alternative method of contactless payments,” said Jajoo. “However, this tendency to adopt cryptos as a payment mode is heavily linked to people's willingness to own cryptos for investment or trading purposes."
Jajoo, however, adds the rider that awareness of the downsides should be there for all parties involved in the transaction. "Restaurants and consumers should know that once a cryptocurrency payment goes through, it is permanent, which can be a risk for small businesses. Such transactions can only be refunded by the party receiving the funds.
“Businesses that accept crypto should be prepared for the extra effort required to facilitate customers requesting refunds by keeping track of how much money each customer has paid."
Traction with hotel stays?
The UAE’s hospitality sector has become the latest to allow guests to pay using crypto. Those properties that cater to a millennial or a younger guest profile certainly will need to offer such an option.
Being first to market with crypto payment gives a clear competitive edge. We have seen strong traction in the number of crypto transactions at Stella Stays since we introduced the service in February.
"Global companies are saying the same; at the beginning of this year, the CEO of Airbnb, Brian Chesky, reached out to his 405,000 Twitter followers, asking for their suggestions on improving the booking service. The results showed strong demand for crypto payments, suggesting that travellers are significantly more likely to own and utilise cryptocurrencies than the general public."
While bouts of price volatility will mean "traditional hotel groups and landlords take some time to accept cryptocurrency, the crypto is not going away," said Zikra. "The market and consumers will always reward businesses for adapting quickly to the newest trends and tech."
Since we introduced crypto as a payment method, we have had numerous requests from multiple hotels and restaurants to enable this feature. We have 10+ brands/establishments that have already activated. We should have over 100+ restaurants offering crypto as a payment method very soon, based on the interest we have received