by WEX Travel
If your organization books accommodations for today’s travelers, you’re well aware of the various vendor payment options available to you. Each has its pros and cons, and it’s likely you use a mix of payment types to optimize internal processes, maximize your cash flow, and accommodate the needs of your suppliers. Virtual cards are becoming a widely accepted form of payment for B2B transactions—and a great alternative to the more traditional plastic card and and paper-based methods.
PhoCusWright’s white paper, Virtual Reality: The Rise of Virtual Account Numbers in Travel Payments, shares results from a study exploring the adoption of virtual cards by traditional travel agencies, online travel agencies, and corporate travel managers in the global travel industry. The study shows that virtual cards are helping all three types of B2B travel buyers meet their top travel payment challenges, which include:
- Credit card fraud
- Currency conversion and management
- Processing manual payments
- Reconciling payments with invoices
Here are the reasons why virtual cards can help simplify your payments:
More security – Over half (53%) of the travel companies in the PhoCusWright study rated “reduced risk of fraud and supplier default” as the most important virtual card criteria. After all, payments to suppliers made via check or wire are more prone to loss and fraud, and physical credit cards are at more risk of theft. Managed over a trusted credit card network, virtual card numbers are issued for a one-time use and offer personal identity information protection.
Precise controls – VCNs enable you to can set transaction-specific controls for when, where, and how payments are authorized, including how much. And you set the terms for when a hotel can charge-back—at the time of reservation or at check-in or check-out. This helps you optimize cash flow, and eliminate fraud risks and misuse.
Lower costs of doing business – For starters, the processing of traditional check or wire transactions, particularly outside the U.S., can be very costly. When you’re able to make real-time, automatic payments via a VCN network, your organization may be eligible for dynamic pricing and discounts from your suppliers.
Easy reconciliations – Thanks to more efficient payment flows with cleaner data (think automatic matching), reconciliation becomes simpler and you can begin managing by exception. And you’ll enjoy enhanced reporting capabilities since more information comes back into your system.
Global acceptance – Virtual cards are the ideal global payment platform, working in any market around-the world. Foreign exchange risk is eliminated for cross-border transactions, as your international partners receive payments in their local currency—the same way they’re paid when accepting a credit card from any customer.
If you haven’t explored the use of virtual credit cards as an electronic payment solution for your hotel partners, it’s time to take a serious look. According to Ardent Partners’ June 2013 research, 63% of survey respondents agreed that suppliers are “more favorable to accepting card payments today than they were three years ago.” More suppliers are seeing the advantages, such as faster receipt of payments, improved payment data, and enhanced security. Plus, their property management system workflows or configuration settings don’t require anything different, process-wise, than a consumer credit card.
Virtual cards are truly a win-win, helping you and your partners streamline business transactions—allowing you to focus on providing your customers with satisfying travel experiences.