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Posted March 10, 2020

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After over a decade in the travel market, virtual card numbers have become a best practice. So what’s next for travel payment processing in the coming decade? Data insights, mobile wallets, and expanded virtual card technology are on their way. 

When virtual card technology was first introduced over a decade ago, it offered benefits to travel companies that were truly innovative: improved fraud protection, easier reconciliation, cost savings on foreign exchange, and robust, customizable data that helped companies plan and forecast more efficiently. But what’s next? As we enter a new decade, what new innovations are on the horizon for payments in the travel industry? 

Data insights will become invaluable

Data is increasingly being used in real time to change behaviors, systems, suppliers, and make important decisions. Virtual cards combine data insights, operational efficiencies, and fraud protections which are crucial to these advancements.

Virtual credit cards have a unique and dynamic feature that allows real-time data to increase business decisions. Mass single-use virtual cards, combined with the power of the underlying payment processor data, create the ability to become increasingly precise about real-time next steps. An AI Fraud engine can enhance banking fraud detection by helping data analytics software recognize potential fraud cases (or false positives) while avoiding acceptable deviations from the norm.

The same AI data tools can assist the virtual payments provider with enhancing products and solutions to create long-term end user benefits such as digital self-serve tracking, real-time alerts and reporting. Travel companies that utilize data to create efficiencies and more enhanced operations will ultimately be the winners with their customers as they detect problems before they arise, predict future opportunities, and allow for greater features and functionalities for the customer experience.

Mobile wallets will see widespread adoption

The expansion of mobile in the consumer world is growing at pace, according to eMarketer, mobile wallets like Apple Pay and Android Pay were used by more than 20% of American consumers in 2018, and over 50% of retailers in the U.S. are able to accept mobile wallets. In some areas of the world, usage is much higher. Norway is at 42%, while China is at 47% of consumers regularly using mobile wallet apps, such as Alipay and WeChat Pay. The fast growing adoption means the next move is likely to be with commercial cards. 

Mobile wallets have the potential to completely change the user experience in both consumer travel as well as corporate travel. As we’ve explored in the past, business travelers are more tech savvy than consumer travelers and rely heavily on their mobile devices during travel, which could make mobile wallets an ideal solution.

In the realm of using virtual cards for travel, mobile wallets bring the ability to have real-time digital issuance, spending, and reconciliation to the end user. By putting the experience in the hands of the business traveler, there is no need for outdated plastics or receipt collection. 

While bringing more convenience to the business traveler via payments on the go, mobile wallets also bring in more control – controls that can be pre-set to drive corporate compliance. In fact, capabilities like geolocation can be embedded and enabled to improve authentication rates while traveling abroad and also provide safety for employers needing to ensure they can reach their business traveler if required.

Travel companies who implement these solutions can significantly reduce the friction of payments for both the traveler and the backend processes they support. As with all global payments, adopters will need to address the different technologies used in mobile wallets in different regions of the world. 

Virtual card technology will cross into other industries

And finally, expect to see virtual card technology moving into other payment areas. For example, many consumer banks have created enhanced propositions for one-time usage to improve e-commerce purchase journeys. 

For commercial uses, it has now become standard for virtual card numbers to be used by travel companies to pay other suppliers who were typically paid by traditional credit card or checks. In fact, governments are seeking to use virtual cards to introduce elements such as two-factor authentication. By using a virtual card in Europe, cards can be processed in real-time without the need for two-factor authentication. This is due to the secure, one-time use nature of the cards and the business-to-business use case.

Innovation is happening faster than ever in the travel industry. As new technologies emerge, expect the leading travel companies to be quick to adopt the technologies that offer greater fraud protection, more efficiencies, and a better customer experience through every stage of the travel journey.

Understand what WEX’s Travel Team notes as the 2020 Travel Trends by watching this video.

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Alexandra Limerick

Alexandra Limerick

Based in London, Alexandra plays an instrumental role in growing the WEX business globally, innovating the offering and helping customers to transform the way they pay and get paid. A payments expert, Alexandra brings a wealth of experience to WEX having joined from Visa where she headed up the function which drove the development of new payment technologies for the scheme. Alexandra specializes in digital transformation, proposition development and scaled operational roll outs to bring about measurable change in customer payment behaviors.


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