Virtually seamless
When is a card not a card? Virtual solutions are rapidly becoming an increasingly popular payment option
G
rowth in the use of virtual cards appears to be exponential: Citi saw 40 per cent growth year-on-year in the first
two months of 2016, and this follows an annual doubling of volumes last year and for 2014. Meanwhile, Barclaycard has seen double-digit growth every year for the past three years, and use of Airplus’s AIDA unique identifier system grew by 32 per cent in 2015. Concur has seen commercial transactions using virtual cards double in the past five years. However, virtual cards are still relatively
new and therefore not as mainstream as traditional forms of payment. “Cor- porate or personal credit cards are still number one, then cash, followed by lodge cards and then virtual cards, which are now ahead of bank transfers,” says product market- ing manager for Concur, Roberto Scolaris. “Virtual cards account for around one-fifth of the monetary value of cash transactions, so it is a growing
14 BBT CORPORATE CARDS SUPPLEMENT 2016
sector. But we see their use largely limited to industries such as oil and gas, and aerospace consultancy.”
Their appeal is the ability to define their use by value, time and location; that they can be set up to cover one transac- tion or several; and that they can be limited by number of transactions or maximum amount
per transaction. Other
potential restrictions include currency and merchant categories, so that it is used only for hotels, car rental, rail and so on. This level of control not only reduces the likelihood of fraud, but it also makes reconciliation easier. In addition, says Diners Club International marketing
direc-
tor Adrian Steele: “Users of Diners Club UK Virtual Card receive a card image [front and back] as well as the key card details for a transaction, and are able to administer the virtual card set-up, with reporting on cards created, authorised and transacted avail- able in real-time.”
Just as corporate customers and their suppliers are getting accustomed to ac- cepting and using virtual cards, so are those providing them getting more astute about how they market them. Morgan Salmon, head of commercial cards product management for the EMEA region at Citi, says: “We are getting better at how we approach our clients and how we choose solutions for them; and success breeds success, so one of our clients using it successfully in one type of spend allows us to replicate that with a number of other clients.” Bank of America Merrill Lynch (BoAML)
says its Travel Pro product makes for a seamless payment process. “Travel manag- ers have commented that this capabil- ity helps them to centralise all business travel-related payments, without the need to issue individual cards to every single employee,” says BoAML’s head of EMEA commercial cards, Melissa Gargagliano. “Also, the enhanced reporting helps travel managers to reconcile business expenses and allocate them to the right cost centre.” She adds: “While there is definitely a place for individual corporate cards and central travel lodge accounts, we see seam- less virtual payments paving the way for the next chapter in payments innovation.”
PAYMENT CATEGORIES Although lodge cards remain the best form of payment for air travel, other cat- egories lend themselves to virtual card payments, such as hotel billback, rail travel and payments for non-cardholders such as contractors and temporary staff. “Until now, these have not been carded properly,” says Salmon. “And virtual card
In association with
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