The use of business travel virtual payments remains relatively low, but this form of payment will grow in the future due to its many benefits.
Business travel virtual payments are made with credit cards that don’t actually exist. A virtual credit card (VCC) has a number, a card verification value (CVV) and an expiration date, just like a traditional card. And it can be used to make business travel payments (like at hotels, for example) from a centralized location.
In 2016, less than 1% of travel managers were supporting travelers with virtual payments. That figure grew to 11% in 2017, and currently 40% of all travel managers are considering the use of virtual payments.
You may be unfamiliar with virtual payments, or you may be actively considering them for your travelers. Either way, here’s an in-depth explanation of the benefits of business travel virtual payments, as well as how to get up and running with them.
The Benefits of Virtual Payments
There’s a reason why the use of VCCs rose dramatically between 2016 and 2017: Virtual payments deliver a range of benefits that simply aren’t available with traditional corporate cards. Those benefits include:
Spending Control: Travel managers have greater control over spending when VCCs are used. 37% of travelers will book hotels outside of their company’s travel program, and 15% of travelers will book air outside of their company’s travel program. Virtual payments can encourage travelers to book through preferred channels, and they also give travel managers greater visibility into overall spending.
Fraud Reduction: With $6.4B in global credit card fraud annually, practices that use one credit card to pay for hotel stays are prone to fraud and provide an opportunity for internal misuse. Virtual credit cards greatly reduce fraud, too. A specific VCC can be configured for short-term use and for a specific spending limit. With these constraints in place, it’s difficult for fraud to occur.
Duty of Care: Traveler safety and well-being is a key concern. It is more difficult to assist your travelers during trips if they’ve booked outside the program. There is a significant risk associated with not knowing your travelers’ itinerary or where they are located at any given time. With virtual payments helping to encourage travel booked within the program, you’ll be able to better deliver on Duty of Care.
Easier Reconciliation: Reconciliation is very time consuming, and is often based on limited data. The unique card numbers tied to specific individuals make virtual payments far easier to reconcile during monthly reporting and ongoing audits.
Enriched Data: Data is the key to better managing travel spend and your overall travel program. With VCCs in place, you’ll enjoy access to even more data as you make decisions and optimize your company’s travel spending.
Seamless Process: For the traveler, VCCs create a streamlined process when making payments on the road. For example, no longer do travelers have to worry about the payment step when checking into hotels and during other activities that once required traditional cards. Instead, they can focus on doing the job at hand.
Contractors, recruits and infrequent travelers often require special or manual processes. As an added benefit, virtual credit cards make travel easier for employees who don’t have corporate cards.
5 Steps to Setting Up Virtual Payments
Are you convinced that VCCs are right for your company? If so, follow these 5 steps to get up and running with business travel virtual payments:
1. Choose a Provider: Plenty of companies offer VCCs. You may find that your current bank offers them, or you may want to shop around for other solutions.
2. Sign an Agreement: You’ll want to come to an agreement with the provider, while also ensuring that the chosen provider’s products are compatible with your travel management company and its systems.
3. Align Your Systems: Next is integrating VCCs into the travel platforms and systems you use through a travel management company. Again, enriched data is one of the great benefits of using VCCs, and aligning your systems will automate data capture for reference and analysis later on.
4. Test Performance: Before you roll out a business travel virtual payments program to your employees, you’ll want to perform tests to ensure that they are working properly.
5. Launch Your Program: The final step is launching your virtual payments program to your traveler. Remember: VCCs should make life easier on your travelers, so be sure to frame this new program as a benefit to them.
Need Help Setting Up Virtual Payments?
You don’t have to go it alone when evaluating and implementing business travel virtual payments. At JTB Business Travel, we offer comprehensive products and services for companies large and small. We’ve partnered with Sabre to bring you Virtual Payments that make it easier for anyone traveling for your company to pay travel-related expenses.
We can provide expert guidance and support as you consider your options and implement a solution. Behind every recommendation we make and each service we provide is a common sense approach to business travel.
Learn more about virtual payments through JTB Business Travel.