by William Meek
For online travel agencies, the payment provider you choose can impact everything from cash flow to reliability to acceptance and even profitability.
Online travel agencies (OTAs) have many choices when it comes to payment solutions. Working with the right provider can make all the difference in helping manage issues from cash flow and working capital to the efficiency of payments, and more. Here are five challenges that, with the right payments provider, you should never have to experience.
Challenge 1: Cash Flow
Online travel agencies have numerous suppliers in every corner of the world. According to recent Phocuswright research, 38% of travel suppliers experience challenges in the length of time that it takes to receive payments from OTAs. In order to maintain excellent relationships with those suppliers, a solution that allows real-time payments is vital.
OTAs can shorten the supplier payment terms without eating into their own cash flow by choosing to work with a payments provider that pairs Virtual Card Numbers (VCNs) with a line of credit. VCNs can be integrated with existing processes and systems to automate the payment process, improving supplier relationships and cash flow for both the OTA and their partners.
Challenge 2: Payment Fraud
Every day, fraud seems to be climbing the charts when it comes to payment processing. In fact, 56% of travel suppliers are worried about fraud when accepting payments.
WEX VCNs are single-use cards that can all but eliminate instances of fraudulent use. Because they allow users to set an exact transaction amount, and to control the Merchant Category Code (MCC) and charge effective period, VCN’s make it nearly impossible for fraudsters to successfully charge the card. Additionally, the use of a VCN comes with built-in chargeback protection, should fraud or payment disputes occur.
Challenge 3: Lack of Support, Guidance, and Innovation From Travel Payment Providers
When choosing a payments provider, you can choose a product, or you can choose a partner. Payment solutions are more than an “add-on” treasury service and should not be just transaction-based. With the right payment solutions provider, you should have a partner with a deep knowledge of the travel industry to help you customize and implement the best solutions for your business.
In addition, understand whether that partner will provide a dedicated relationship resource to help you with implementation and innovation in addition to general account management. Knowing that you have a resource to connect with provides peace of mind when it comes to troubleshooting and innovating for your business.
Challenge 4: Outsourced Card Processors
Unexpected card declines can be a major frustration for suppliers and OTAs. Many payment providers use outsourced processors to manage the global transaction approval process. These processors often use legacy technology and are subject to frequent scheduled maintenance outages. Ensuring that you are working with a partner who is on the cutting edge of innovation and technology is key to getting the end experience you want and need.
WEX, for example, is a payments provider with its own processor, and thus, is not at the mercy of another company’s updates – guaranteeing rock-solid payment processing with 99.99% uptime.
Challenge 5: Paying Travel Suppliers in Foreign Currencies
Your business relies on partnering with travel suppliers around the world, which can make payments complex. Exchange rates, foreign exchange fees, and fluctuating markets can all pose risks to businesses. To minimize this risk, you should partner with a payments provider that has the tools to issue payments to suppliers in their own currencies, minimizing both fees and risk.
With WEX, you can issue virtual cards in 22 different currencies worldwide, avoiding the risk of cross border fees, and currency exchange and saving up to 3% on foreign payments.
Your payments processing solution can either hinder your business or help it flourish. Be sure to look at various options and choose a solution that offers the expertise, innovation, and dedication to a collaborative partnership that can help your business succeed now and continue to grow in the future.
Take a look at what WEX’s leadership team has to say about its product portfolio advantages in this video.