PAYMENTS
VIRTUAL
VIRTUAL CARD
NUMBERS: THE SOLUTION TO
exactly where the payment must be made, and when, and set a limit on the amount to be paid. That gives companies complete confidence the money will be spent for the intended purpose, whereas there are always some concerns about potential for misuse when plastic cards are dished out to employees. “You can use virtual numbers for people who you wouldn’t normally give a plastic card to, like interns or contractors,” says David Harrison, vice-president Visa Commercial, Visa Europe. “Companies are generally using contractors more, which is speeding up adoption.” Mason agrees. “Customers in mining and oil really like it,” she says by way of example. “They tend to travel to challenging locations and use a lot of contract staff. If you have 50 men going to work at an oil well in Nigeria, you don’t want them walking around with plastic cards for lots of reasons.”
BEYOND THE PAIN POINTS Mastercard Worldwide’s head of corporate payment solutions, Rene Stynen, is among those who think single-use numbers will eventually become ubiquitous for travel payments. “It will take time because there are a lot of parties involved,” he says. “At the moment, it’s a question of where the biggest pain points are – which are low-cost carriers and hotels – but there is no reason why they cannot be used for regular airline payments as well. I think it will happen, because if you
14 • Buying Business Travel 2013
have only one transaction per card number, everything becomes very straightforward. You can do away with the whole machinery of reconciling transactions because the transaction is already reconciled.” The major stumbling block to this vision has been an inability to make virtual numbers easily available to TMCs within their regular booking process. Now that is changing, with the major global distribution systems offering TMCs the opportunity to generate virtual numbers seamlessly as an alternative to a lodge card or corporate card number at point of payment for a reservation. “Initially, virtual card numbers were seen as a stand-alone solution, but it is clear that the true value lies in deeper integration with reservation systems or back-office systems,” says Stynen.
MEETINGS AND EVENTS Compelling as this logic is, however, issuers report that much of the growth they are currently experiencing is not in regular travel. Both Barclaycard and Citi say virtual card numbers are increasingly being used for meetings and events (M&E), for example, and this April Airplus launched a specialised M&E solution based on its AIDA single- use numbers. Meetings organisers can set up a centralised account for the event they are handling, then append a single-use number to every payment they make for the event. “Reconciling spend is a nightmare for
MANAGED TRAVEL 2.0? NO CLAIMS HAVE BEEN made yet that virtual card numbers can bring about world peace or cure the common cold, but their most enthusiastic supporters do perceive them as a panacea for many problems that afflict corporate travel. Among them is the much-commented-upon challenge of Managed Travel 2.0: the question of how companies can continue to manage their travel spend if employees increasingly make independent decisions about which travel suppliers they use and the channels through which they book them. In February, virtual card number specialist Conferma announced a partnership with the booking and expense management tool provider KDS, which means that bookings made through KDS can be paid for with a Conferma-generated card number. The two companies are also working on making Conferma numbers available for the KDS Flex T&E product. Flex T&E kicks in on employees’ desktop or laptop PCs (if they have been configured) should they make a booking via an unauthorised channel, such as a low-cost carrier website. Flex T&E intercepts the booking and steers the data into a report so the travel manager can still capture the reservation information. The intention is that Flex T&E will automatically generate a Conferma virtual number to pre-populate the payment page of the unauthorised booking channel. As a result, the process would capture the financial data, ensuring a consistency of payment method no matter how a trip is booked. “Payment is the unifying piece in the jigsaw,” says
Conferma chief executive Simon Barker. “If you control payment, you can still drive policy and collect the data.” Helen Mason at Bank of America Merrill Lynch offers a similar vision. “Payment is the one common denominator for every type of booking,” she says. “Every employee could have access to single-use numbers and then book wherever they need to.”
event companies,” says Airplus UK managing director Yael Klein. The power of virtual card numbers is also starting to improve payments for all sorts of other transactions. Visa, Citi and Airplus all report virtual numbers being used as an alternative to wire transfers or BACS payments for a wide variety of business- to business purchases, such as temporary labour or stationery. “It is really replacing the old
fashioned purchasing card,” says Klein. Travel’s payment baby is growing up quickly to become an extremely able all-rounder. n
In association with
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