VIRTUAL UNIVERSE
V
irtual card numbers and accounts have been around for many years, but there are signs that they are gaining more traction within
both the infrastructure of the business travel industry and more widely across the procurement departments of companies. The last few months have seen a pletho-
ra of deals with some of the biggest names in corporate travel signing contracts to make more use of virtual card numbers. These include leading travel management company (TMC) Carlson Wagonlit Travel and travel technology giant Amadeus, who have both announced agreements with virtual card specialist Conferma to increase their services in this area. “The volumes of virtual cards we have
deployed on our platform in the last 12 months have more than doubled, and we expect that growth to be significantly higher in the next 12 months based on our current pipeline,” says Conferma’s finance director Stuart Birkett. “In the last 12 months we have started issuing virtual cards in new geographic markets, including Brazil, Australia, Canada, South Africa and Russia.” One of the main drivers behind the use of virtual card numbers has been the desire of low-cost carriers to work with TMCs and other travel agencies without having to use “more expensive” payment systems, such as the International Air Transport Association’s (IATA) Billing and Settlement Plan (BSP). Instead, the likes of Easyjet have forged partnerships with virtual card specialists such as Enett, which is majority-owned by another travel technology firm, Travelport. Card issuers are also making greater
inroads into the virtual card market. For example, Bank of America Merrill Lynch (BAML) launched its Travel Pro payment solution in February across 27 countries within the Europe, Middle East and Africa
14 BBT CORPORATE CARDS SUPPLEMENT 2015
(EMEA) region. So how can developments in virtual card technology and products help companies to manage travel spending and increase compliance?
MORE CONTROL Ask anybody within the field of virtual cards about their selling points and you get almost unanimous answers: they give better control over travel payments, reduce the chance of fraudulent use, and offer improved reconciliation and cost allocation, as well as making expense management and reporting easier. American Express vice-president of
sales Alan Gillies says: “Virtual card numbers offer some significant advan- tages to companies: first, there’s control – virtual numbers cannot be stolen and are almost impossible to misuse, as limita- tion can be set on the amount, data and merchant category for each transaction. “They also offer much more efficient
reconciliation, and so help to drive cost savings. The data they offer provides companies with enhanced information.” Virtual card numbers also offer flex- ibility as they can be used for a single travel transaction such as a flight or hotel booking, a series of linked transactions relating to a specific project or event, or for central travel accounts, which may have previously been served by a lodge card. By using 16-digit virtual numbers, there should theoretically be no problems reconciling these transactions within the corporate systems to get a more precise picture on spending and budgets. Martin Chapman, travel and expenses
payment solutions business leader at Mastercard, says that virtual cards can also be used for online purchases such as inter- net fares from low-cost airlines that may not be available on the global distribution systems (GDSs), as well as for hotels, car rental and TMC fees. “The added benefits
Virtual payment methods are becoming increasingly popular – but don’t throw out those plastic cards just yet.
of not having to write off transactions, not misallocating transactions, and not having to manage unmatched transactions, will provide a great cost saving for both the corporate and their TMC,” he adds. Lauren Millar is commercial cards global marketing manager at Citi. She also stresses the “significant cost savings” for companies using virtual cards due to lower administrative fees and streamlined processing times. “The virtual card also replaces traditional payments which bear a cost – anywhere from 25 cents for a BACS- type payment to US$15 or more for a wire transfer,” she says.
MAJOR GOALS So what’s next in the world of virtual pay- ments, and what other areas of corporate travel management can these products effectively reach? One of the major goals has been to integrate successfully the use of virtual card numbers within existing booking platforms used by travellers. BAML believes it is on to a winner with its new Travel Pro product: this uses virtual card technology to allow compa- nies to centralise their travel spending and capture more detailed data using customised virtual card accounts, which are then integrated with the client’s TMC without changing any travel booking pro- cesses. Melissa Gargagliano, the bank’s head of EMEA commercial cards, says: “Travel Pro uses dynamically generated single-use credit card numbers, which are integrated directly into the travel booking process – this makes the solution unique to anything else in the industry. Travel Pro enables corporate clients to expand central travel bookings from air to hotel, low-cost airlines, rail and car hire, with enhanced data for all. While traditional lodge cards continue to be a part of our core offering, we understand that sometimes our clients face challenges when it comes to reconcil-
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