VIRTUAL CARDS For now, though, the big buzz is
around single-transaction virtual card numbers, which payment providers, merchants and customers alike are increasingly appreciating solve a multitude of challenges. Hotel billback is a prime example. Employers tend not to issue corporate plastic to infrequent travellers or various other groups of workers, such as trainees, and those without corporate plastic may either lack a personal payment card or be reluctant to use it for work purposes. The alternative is billback, which means the corporate client, or more often its TMC, asking the hotel at time of booking to forward the guest’s invoice for payment. Manual billback of this type is extremely cumbersome, requiring considerable administration on the part of both TMC and hotel, and with numerous risks of a breakdown in communication or non-payment. Virtual card numbers have proved
to be the solution. By issuing a payment number for the transaction at time of booking, the hotel can be guaranteed payment and the number acts as a unique identifier which ties the reservation to the payment for easy auditing. “There is very fast reconciliation because the number is for only one transaction,” says Rene Stynen, MasterCard Europe head of large market commercial products.
There are many more advantages besides. “It gives a lot more control and security,” says Simon Barker, chief executive of Conferma, a company which specialises in managing virtual card numbers. “Because it is a single-use number, fraud cannot happen, because once you have paid, that’s it. That also means it is very easy to set up. There is no need for any credit checking of cardholders.” What makes the process even
more secure is that use of the virtual card number can be determined very
“Because it is a single-use number, fraud cannot happen, because once you have paid, that’s it”
tightly at the time it is generated. The customer can specify which merchant, or merchant category, the number is to be used for and which day it must be paid. A limit can also be placed on the value of the transaction, and it is even possible to specify the exact amount to be paid if this is known in advance.
Another major benefit is the quality of management information (MI). Internal corporate details can be appended to the transaction, such as employee number or project code, and if the payment is for a hotel
MOBILE PAYMENT
THE NEXT BIG THING in the card industry is mobile payment. A recently published white paper from AirPlus International/Association of Corporate Travel Executives (ACTE), entitled Mobile Payment: How it will T Corporate T
Management, predicts that mobile payment will become increasingly common in the consumer market within the next 12 months, with the corporate market following from 2014. There are two principal
technologies of relevance to corporate travel. The first is a mobile wallet, which is the
In association with ransform ravel and Expense
collection of various virtual payment methods within a single phone or other mobile device. That collection could include virtual versions of the traveller’s plastic personal cards as well as a version of their corporate card, single-use cards and stored electronic cash. The second technology (the type used to read the Transport for London Oyster card) is near- field communication (NFC), which can communicate data between a mobile wallet and a merchant’s pay-terminal. But perhaps the biggest
breakthrough of all is that, in theory at least, mobile wallets will be able to interact with
other features and apps stored in the user’s phone, including not only global positioning but also mobile itineraries and, most crucially, their expense reporting tools. Payment, travel and mobile
experts interviewed for the AirPlus/ACTE paper firmly believe mobile payment will make travel management easier. One major reason is that it will make not only payments but expense reporting effortless for travellers, thus helping to keep them compliant with the travel programme and improving visibility of spending data. However, they also point to more than a dozen other
ways in which data capture and compliance will be improved. To give just one example, an employee poised to pay for a coffee with a mobile corporate card in a branch of Starbucks can be instantly told on their phone that the transaction will not be accepted as a legitimate travel expense because the shop is within 5km of the employee’s regular workplace. Other improvements and
innovations include the real- time appearance of data in expense reports (instead of a 24- to 48-hour delay), more accurate identification of hotels for MI through GPS positioning and even a way to tie ancillary
2012 Buying Business Travel 21
stay, travel managers gain more information than just the vendor name, payment total and payment date generated by a conventional plastic card. With a few exceptions, such as Premier Inn and Travelodge hotels paid for through a Conferma number, travel managers do not receive full folio data, meaning a complete invoice itemisation. However, says AirPlus International managing director Yael Klein, “you will at least see the number of room nights and the VAT amount”. Payment issuers love virtual
cards, too. Not only does it help them provide a payment method for travellers they could not reach before but, says Klein, “it is not very profitable to issue plastic cards that are used only once a year”. However, lest anyone should think virtual cards ought to be renamed “virtuous cards” and can solve all armed conflicts, the eurozone crisis and Arsenal’s leaky back four, there are a couple of drawbacks to understand, says Brian Merry, director of product for HRG. One, he explains, is that “a large number of hotels still do not understand what virtual cards are. It is perhaps a problem in 15 to 20 per cent of establishments, but it is reducing every day.” The second problem Merry identifies is that if travellers walk out
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