by Anant Patel
Travel Management Companies get more than payments from their payment services partners.
Global business travel is expected to top $1.66 trillion by 2023 (up from $1.3 trillion in 2017). It’s no wonder businesses partner with travel management companies (TMCs) to negotiate discounts, oversee vendors, and manage travel policies and controls for their corporate travel programs.
With margins typically described as paper-thin, wafer-thin, or famously thin, TMCs have justifiably been repositioning themselves as advisors who offer clients value through a range of services. In today’s evolving travel industry, it’s increasingly important for TMCs to raise their game, finding new ways to save clients money and increase customer satisfaction, while reducing costs and enhancing revenue.
Solutions for changing needs
It isn’t feasible to add in-house expertise for each new service customers require. That’s why TMCs are embracing collaborations with partners,like WEX, who have proven solutions to meet or exceed their customers’ expanding travel management needs.
Our 20+ year experience with travel agencies and companies has emphasized the importance of not only providing better service and better technology, but also the critical need to focus on innovation and customization.
TMCs who adapt to change obtain long-term success. Their clients’ needs coupled with the demands of a rapidly changing industry make flexibility a must. Strategic partners who team up with TMCs must be proactive and understand their business and their products as well as we do our own.
Data drives decisions
Because TMC margins are thin, reducing costs and enhancing revenue will always be a priority. Significant value can be realized by managing foreign exchange rate markups and cross-currency fees. WEX pay suppliers in over 150 currencies (and in 210 countries), which typically saves in the region of 3% per transaction. Adding a credit line improves cash flow and allows TMCs to take advantage of dynamic supplier pricing in return for real-time payments.
But, for TMCs’ payment services partners, providing virtual payments alone is not enough. The collaborative relationships TMCs are now offering their customers include risk management, fraud prevention, inventory management, and other services, all of which can be acquired outright or supplemented through an experienced partner. Corporate travel managers need data, and they rely on TMCs to provide it. Much of that vital information can be generated by the payment services vendor they chose.
In it’s 2019 Business Travel Buyer’s Handbook, Business Travel News explains that gathering data is critical to any travel risk management program because travel managers can better understand travel volume and patterns. They can see where travelers are going, when they’re traveling, and how often their travel occurs. Their most frequently used airlines, hotels, and other suppliers become apparent as well.
Virtual card numbers good for TMCs, travel managers, and suppliers
TMCs choose virtual cards (VCNs) to pay suppliers because they are single-use (or limited), meaning they are unique per transaction, and they offer the ability to add user-defined fields to acquire robust data.
VCNs’ built-in controls minimize the risk of fraud and maintain the integrity of company travel policies; their simplified, automatic reconciliation capabilities benefit both employees and employers.
Phocuswire.com ran a series on VCNs last summer, noting the developments happening with e-wallets that would enable travelers to use “tap-and-go” terminals and QR codes. “The functionality could also enable travel managers to build more flexibility into their policies,” writes Mitra Sorrels, “knowing that with virtual payment technology all spend would be captured and visible.”
As more TMCs move toward VCNs, more hotels will reap the benefits of virtual cards. VCNs can be easily integrated into hotels’ existing systems and processes and are paid through the various card scheme networks. Another major benefit of VCNs for hotels is that they offer faster receipt of payments for dynamic inventory pricing.
Payments management isn’t just about payments
The payments industry evolution has been described as “one of the key drivers” of the travel industry’s move from an offline business to an online one. For TMCs and corporate travel managers, payment management is an essential, multifaceted component of a successful travel program and it addresses many concerns including fraud prevention, payment reconciliation, and travel policy compliance.
To learn more about the WEX Virtual Card, email WEXCorporatePayments@wexinc.com, or click here.