Skip to main content

Content is loading...

Loading...

Close

Posted May 23, 2017

virtual payments travel

by

According to a report from 2015, travel and tourism contributed more than $10 trillion to the global economy and business travel is a large part of this ever-changing industry, making a global economic contribution of $1.1 trillion.

Business travel is a huge industry that is constantly growing and ever-changing.

Why are TMCs adopting VCNs?

A Virtual Card Number (VCN) is a single-use card number enabling secure payment of suppliers and facilitating automatic reconciliation. VCNs are used to make real-time payments and are accepted globally by travel suppliers, such as hotels, through existing terminals.

By using VCNs, a TMC is able to gain greater control over payments made and benefit from enhanced security features.

A VCN is only issued as and when needed and, if necessary, only when a cost is approved. The TMC can specify and limit the amount to be paid and is also able to ‘lock down’ the supplier or type of supplier (by Merchant Category Code) for each transaction. These security features can be employed to significantly reduce the risk of fraud and misuse.

In addition to reducing the risk of fraud, TMCs are choosing to use VCNs to pay suppliers as VCNs are single use and are unique for each transaction, therefore enabling automatic reconciliation. The ability to add user-defined fields during card creation, results in rich and relevant data.

VCNs also allow TMCs to make significant savings when paying international suppliers in 210 countries and over 150 currencies, typically saving 3% per transaction. In addition, TMCs can benefit from a credit line to enhance cash flow and even earn money on payments made.

What does this mean for hotels?

Hotels are a key supplier for TMCs booking business travel on behalf of their clients. As more TMCs move towards using VCNs to pay suppliers, it is important that hotels understand the benefits of receiving payment via VCN and how easy it is to process payments received by VCNs.

Whether a hotel stay is pre-paid or post-paid, VCNs can be easily integrated into existing processes to ensure that payment is received promptly by the hotel. VCNs offer faster receipt of payments for dynamic inventory pricing.

VCNs allow hotels to receive payment in their local currency which avoids fees that can be incurred when receiving payment in a foreign currency, plus VCNs can be processed through a hotel’s existing systems and are paid through the Mastercard and Visa networks.

Per transaction controls offered by VCNs allow limits to be made to the transaction amount, when the payment is available (which could be upon guest checkout) and locks the payment down to hotels to avoid fraudulent use. This is also of benefit to hotels as well as the TMC, however it means that hotels must ensure they take care when processing payments made via VCNs.

Key points for hotels to consider when processing payments made via VCN:

  • Pay careful attention to the details stated in the payment instructions – for example, when to process the payment, what costs should be paid from the VCN (e.g. room and tax only)
  • It is important the payment instructions are understood by all staff members involved in checking in/out guests
  • VCNs should not be pre-authorised, the full amount can be charged to pay for the booking
  • Each booking will have a unique VCN assigned to it, the VCN should be charged for that booking only
  • The guest’s credit card should be retained in addition to the VCN and should not be overwritten by the VCN, typically the guest’s credit card is used to pay for incidentals unless otherwise stated
  • Upon arrival of the guest at the hotel it may be useful to set up two folios – one for guest incidentals to be paid by the guest using their credit card and one for the room and tax payment to be paid via the VCN
  • Time restrictions may be set up around when a card can be used (which may differ to the card expiry date) so it is important to process payment in a timely manner and as per the payment instructions
  • Download our hotel FAQs document for more information on how to process VCNs.
Share:

WEX Travel

WEX Travel


Topics