Managing corporate payments used to be a painful experience but virtual payments offer the perfect solution for both TMCs and corporations, according to the Sabre Virtual Payments team
Virtual payments represent a win-win for both corporations and TMCs in the way they can transform corporate payments and remove the pain points created by traditional settlement methods.
There are two main ways in which virtual payments can be implemented to revolutionise the way payments are managed.
For corporations, these virtual card numbers (VCNs) can replace inefficient and less secure legacy payment methods such as traditional plastic cards, business travel accounts (BTAs) or lodge cards.
The major benefits to using virtual payments are that it gives a corporation greater control over spending, enhanced security and easy reconciliation by using a unique, virtual, automated and integrated card number to pay for a specific travel event.
The Travel Management Company: An agency which manages business travel for a company. can also benefit from a reduction in bookings made outside the travel programme, improved processes, the ability to offer added value to the client, as well as having access to an additional revenue source.
Corporations can also keep their existing banking and treasury relationships through the Sabre Virtual Payments gateway, making the switch to virtual payments even easier.
Annette Dreibelbis, manager, Sabre Virtual Payments, says: “The key message about virtual payments is that they reduce risk for corporates by mitigating fraud and reducing the misuse of payments.
“They also help to make sure the travel being booked is in compliance with policy and allows them to manage duty-of-care.”
Reducing fraud and misuse is a huge selling point for virtual payments as restrictions can be placed on the VCNs to make them fraud-resistant.
“Virtual cards are a way to solve these problems,” added Dreibelbis. “Virtual cards are resistant against fraud because the card has limits and validity dates. You can also narrow the details down to the type of merchant who can charge that card.”
Duty-of-care is improved through virtual payments as travellers no longer need to use their own cards when booking travel – this not only improves reconciliation and compliance by travellers but also boosts satisfaction levels by offering them a seamless payment process without the need for a physical card.
“If a traveller is required to go through the Travel Management Company: An agency which manages business travel for a company. to book travel, it solves the problem and makes it very simple for duty-of-care,” explains Dreibelbis.
“You can also do one-on-one matching – so you can match each transaction to the card. It makes cardless travel possible and increases traveller satisfaction.”
Travel Management Company: An agency which manages business travel for a company. payments
As well as these obvious benefits to clients, virtual payments can also replace a TMC’s existing form of payment by using a virtual card in the TMC’s name to pay its suppliers. This helps to improve reconciliation and allows travel agents to leverage enhanced financials on their card programme.
Virtual cards can be used for all types of travel payments including air, hotel and Low-cost carrier - LCCs, also know as no-frills airlines, offer low-fare flights with reduced passenger services (low cost carriers), but also suppliers from outside the travel industry, such as advertising spend, where we are seeing increased adoption.
Through Sabre Virtual Payments, travel agencies can elect to keep working with their existing banking partner towards a virtualised card programme, or leverage one of the Sabre preferred partners to leverage preferential economics – or even do a blend of both. There are over 40 banking institutions available on Sabre Virtual Payments with many more added every year to suit customers’ needs around the world.
A key aspect of virtual cards is that they also protect buyers against a potential financial loss when a travel supplier fails. “Because using virtual card numbers is facilitated via a card network, you can benefit from chargeback if a supplier goes out of business,” says Martin Bladon, from Sabre Virtual Payments.
“This means customers can try and get their money back. That can be very useful if for example a low-cost airline goes out of business, as we have seen multiple examples of since the start of the year.
“There is also more security around foreign exchange. It ensures that you can pay suppliers globally in the currency they need. You can also manage your own forex with our pre-paid and credit-based offerings and have access to competitive rates.”
Virtual payments offer a perfect solution for both TMCs and their clients, which explains the exponential growth in their volumes over the past few years. With new regulations such as PSD2, virtual cards are not just clearly here to stay but will likely become one of the dominant forms of payment to facilitate business travel transactions.
“The use of virtual cards is definitely growing. It’s a matter of when – not if –everybody is using virtual cards,” adds Annette Dreibelbis. “They are a great way to solve a lot of issues.”
To find out more, visit sabrevirtualpayments.com