By Ben Alderman, General Manager North America, Conferma
The landscape of corporate travel payments is undergoing a transformative shift. Financial decision-makers and travel managers are increasingly adopting advanced virtual payment technologies.
A recent survey we commissioned of 400 global decision-makers highlighted that pressures to drive business growth and improve operational efficiencies are pushing them to adopt these innovative solutions. In fact, almost 9 in 10 (88%) of these decision-makers said they are either using or considering using virtual cards for their business payments.
What’s behind this dramatic shift and what must suppliers, such as Travel Management Companies (TMCs) and hotels, do to align with their corporate clients?
Why are payments going virtual?
In our research, spiralling costs was the biggest risk factor identified for preventing growth for businesses surveyed (44%), with one-third listing identifying operational inefficiencies as a major growth barrier. Virtual cards help tackle these issues in a number of ways.
Virtual cards function similarly to traditional credit cards but with added advantages. These cards generate a unique card number with set spend and time controls, allowing payments to be processed without a physical card. This enhances oversight and control over costs in real-time, benefiting both the user and their employer.
When virtual cards are generated at a booking level, all associated reconciliation information can be appended. This creates a simple reconciliation process when the virtual card is charged as all the information captured at booking follows through with the unique card number.
Moreover, virtual cards significantly reduce the risk of fraud. Since the cards can’t be misplaced or stolen and the purchase-to-payment reconciliation is seamless, the risk of fraudulent activity is minimized. Unsurprisingly, virtual cards’ inherent security and improved fraud risk was the most popular benefit according to the surveyed financial decision makers (46%).
The research also found on average, all employees – not just those within the finance function – spend three hours and 12 minutes per week on financial tasks. The inefficient payments process is a huge issue across all areas of a company’s workflow, pulling people away from their main responsibilities. Virtual cards offer a clear solution here.
Investing in payment technologies is not a novel strategy. Almost two thirds (57%) of the surveyed decision-makers are actively investing in these technologies to drive business growth. More than half believe that instant payments could enhance their operational workflows.
Given these benefits, it’s not surprising that the prevalence of virtual cards is already high and growing. According to Juniper Research, the global value of virtual cards is projected to increase over threefold in five years, from $1.9 trillion in 2021 to $6.8 trillion by 2026.
Why the travel industry needs to react
With heightened expectations from their experience operating virtual payments across their business, corporate travellers will be expecting and demanding the same experience across their travel partners.
Hotels can unlock the full potential of virtual payments by integrating this functionality into their Property Management and Central Reservation Systems. This integration eliminates the need for complex encryption, downloads, links, or login processes that can frustrate customers. At the time of reservation, all booking data is matched directly to transaction and invoice data, simplifying the check-in process for both guests and hotel staff.
For business travellers, the convenience is undeniable. No need to use personal cards which can carry financial burden, and they eliminate the need for tedious expense reports with long reimbursement timeframes.
By adopting these advanced payment solutions, TMCs and hotels can meet the evolving demands of their corporate clients while streamlining their operations. This leads to improved profitability and a competitive edge in the market. So, now really is the time for hotels and TMCs to keep up with the demands of their corporate customers and adapt to the ever-evolving future of business travel.
About the Author
Ben Alderman serves as the Commercial General Manager North America and Head of Travel for Conferma. In this role, Ben and his team are responsible for travel agency relationships across North America, LATAM, UK, Europe, and financial institutions in the US and Canada.
Prior to Conferma, Ben was Head of Financial Partnerships for Ramp where his team owned both product and channel partnerships across all financial partners. Before Ramp, Ben led B2B Fintech and Partnerships in North America for Visa where his team was at the forefront of the latest developments in B2B payments. Ben started his career at American Express in a variety of global roles focused on commercial payments and merchant services with a specific focus on Travel.