buyers and their executive travellers are still loyal to familiar and traditional physical payment methods. “Like any new technology, virtual


cards have faced resistance from the industry,” says Gargagliano. Technically, anyone with a card machine can take a virtual card payment. Yet it is the lack of understanding on the merchant’s side that many consider a barrier to change. There is also inconsistent acceptance among merchants globally. “We think this discrepancy stems


partly from education. For many businesses, virtual cards represent a technological change with associated IT integrations,” says Maria Parpou, product director for Barclaycard Com- mercial Payments. The Global Business Travel As- sociation (GBTA) recently created a virtual payment task force to better understand the difficulties in accepting virtual cards. The fact is many buyers think suppliers need new systems in place to accept them. Yet virtual cards are processed the same as a physical card, there is no


This means travellers sometimes run into complications at check-in, with virtual payment having to be presented in the image of a traditional, non- virtual, plastic card – not exactly a step up in the realms of hi-tech, sent via fax or email. Security, whether that’s data security or identity theft, is still a per- ceived risk in this sector, and the ques- tion of who settles the bill if the card is fraudulent. “To improve the acceptance rate of virtual payments, we must demonstrate that the long-standing challenges have reduced and that trav- ellers will enjoy a much easier process with a virtual card,” says Shawna Boyce at American Express GBT. To make virtual payments more widely accepted requires that payment processors and vendors improve existing technologies. The idea is that virtual card generations and payments could then be made easier at the time of service. There is also often concern about implementation, and the time taken to get such a new system up and running. “Good virtual card suppliers can get buyers up and running within days,”


“Currently it is much more convenient to do a contactless transaction than to type in a virtual card number for payment of smaller ticket items, such as taxis and restaurants”


industry, corporate or personal credit cards are still number one, followed by cash, then lodge cards and virtual cards, which are now ahead of bank transfers. “With virtual payments Europe and


Asia have been trendsetters,” says BoAML’s Gargagliano. “For instance, contactless cards, which are common- place in the UK and several European countries, are only now appearing on the US payments landscape.”


FACING RESISTANCE The wholesale use of virtual payments in managed travel is still limited to a handful of industries such as oil, gas, and aerospace consultancy. Inertia has been a key factor to adoption. Many


In association with


difference. The aim is to educate, particularly hotels, about the use of this form of payment and boost adoption rates for business travellers. Accom- modation is the first and in most cases the dominant sector where virtual payments are used. “Yet in some parts of the world, hotels have processes that depend on a physical card, such as rules that they take a photocopy of the front and back,” says Mike Larocque, vice-president of product management at American Express. Hotels may also require prepayment in one part of the world, a deposit in another, or a credit card as a guarantee elsewhere. Not to mention the use of a fax machine to receive copies of a physical card.


says Anthony Hynes, CEO of eNett. There is still a way to go before we


see everyday adoption. Yet the idea of the mixed, digital wallet sits well with buyers and travellers, where virtual cards can be used for hotels, yet other forms of digital payment can be imple- mented for other expenditure. “Currently it is more convenient to do a contactless transaction than to type in a virtual card number for payment of smaller ticket items, such as taxis and restaurants,” explains Jon Fox, commercial director for UK & Ireland at Airplus. “When virtual pay- ments are paired with mobile wallets we will see growth in usage as the experience improves.”


BBT CORPORATE CARDS SUPPLEMENT 2017 15


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