by WEX Travel
Amidst globalization the world of business has been transformed into a cross-currency, cross-border market place.
In his article for PaymentsSource.com, Jim Pratt, SVP and General Manager of Virtual Payments at WEX, explores how travel has led the way adopting innovative travel payment solutions to ensure that international payments are handled in a smooth and secure manner that removes the need for paper and even plastic:
“…Travel is arguably the original cross-border payments industry. A travel agent in New York needs to make payments to hotels in Melbourne, Australia, or anywhere in the world, and vice versa.
The transaction requires a solution that guarantees security and simplicity enabling the movement of thousands of payments and travelers across borders quickly. Virtual cards in the early 2000s helped to propel online travel agencies and hotels forward, providing operational efficiencies, cost savings, and peace of mind for customers and suppliers alike.”
For more, see “Going Green: Another Reason to Go Paperless with Your Payables,” “The Future of Payables: Cutting Paper for Automation,” and “You Have the Technology, Rid Your Organization of Paper Checks” from WEX Corporate Payments Insights.
Emerging Markets Take a Different Approach
The article goes onto explore how emerging geographies, where there is less dependence on legacy payment systems which exist in the US and Western Europe, are taking a different approach to removing paper in payments:
- In India, the government has recently removed 86% of paper currency from circulation in order to transition to digital payments. At CMS-managed ATMs in Mumbai consumers can now pay bills, book flights and purchase tickets without the need for a physical debit or credit card – multifunctional ATMs could eventually become one-stop shops for all payment-related activities.
- In West Africa, countries are introducing new digital currencies. For example, Senegal is expected to launch a new digital currency that relies on blockchain later this year and if successful it will be adopted across the region and integrated with existing mobile platforms.
- In some African countries, where it can be difficult to get paper money to remote villages, people are increasingly using mobile payment services.
Pratt explains that the implications of these innovations are far reaching:
“The implications of these innovations extend beyond the travel industry. They can support more advanced local economics and help to address poverty in communities. It also opens up important discussions on regulation and secured networks. The balance between regulation and stewardship can be tricky; however, governments and industry are working to safeguard and support the free flow of ideas and innovation.”
VCNs: Acceptance is Ubiquitous, Control is Simplified and Cost Savings Are Immense
Following on, Pratt looks at why Virtual Card Numbers (VCNs) have gained such momentum in today’s travel landscape:
“Today, the acceptance of virtual cards is ubiquitous. The control that the payment method offers by setting monetary amounts on merchant-specific cards that are only used once and then terminated has driven wide adoption within the travel industry by corporate business and merchants. Corporate travel management companies can save money and time by using VCNs. FX rate markups and cross-currency transaction fees can add additional expenses and wire transactions can range from $10 to $25 per payment.”
Looking to the future, the article explains that virtual payments will continue to adapt to new platforms, such as mobile and blockchain. It points to the increasing use of tokens to add an extra layer of security for companies making payments as an indication of this.
Pratt urges that companies should focus not only on technologies, but on user experience:
“…all companies will need to focus on more alternative technologies and closely track how they impact the payments ecosystem. The industry and global marketplace is challenging all payments providers and organization to create more advanced platforms that not only make moving money more secure and seamless, but also emphasize the user experience.”
For more information, read the entire PaymentsSource article, Travel Payments Can’t Thrive without Removing Lots of Paper.