The travel restrictions and economic slump brought on by COVID-19 have been a major operational challenge for travel managers, to say the least. You’re not only managing an onslaught of canceled flights, refunds, and unused tickets, but you’re also likely dealing with heavily reduced budgets. But with this disruption comes a unique opportunity. There’s never been a better time to make tweaks to your existing travel program and identify new strategies for saving money and smoothing out kinks when it comes to corporate travel payments. Switching from a corporate credit card to a virtual payment card, for example, can have a number of advantages.
The Rise of the Virtual Payment Card
The corporate travel industry has been abuzz the last few years with announcements of new tech-enabled payment options. In fact, just last year, UATP launched a virtual payment option powered by Conferma Pay. TripActions made its own foray into the virtual payment world with a new product announced in February, and even Sabre and Visa have jumped on the virtual payment bandwagon.
While experts say there’s still work to be done to expand availability and adoption, there are undeniable signs of growth: a survey from AirPlus showed that the number of virtual payment card users has quadrupled in the last four years.
So what makes a virtual payment card so attractive? Unlike a corporate credit card, which comes with a credit limit and other restrictions, a virtual payment card acts as a centralized line of credit. That translates to greater flexibility, more data and oversight, and compelling opportunities for savings, including some significant ones enabled by FairFly’s Faresaver platform. Below, we’ll highlight a few reasons corporate travel payments might be better handled with this burgeoning technology.
Greater Spending Control and Accountability
Virtual payment cards are unique in that you can configure them for specific uses, vendors, locations, and time frames. This makes management tasks like ensuring compliance and carrying out reconciliation more efficient and straightforward. You never have to worry that an employee used funds for expenses that fall outside of corporate travel policies since those restrictions are built into the card. Fraudulent activity is less likely given these limitations, not to mention the fact that the card number issued is a temporary, virtual one, unlike the usual designated account for corporate travel payments that are linked to a specific card.
Since this option gives you transparent data on the card’s use, you can feel comfortable letting business travelers opt for sharing economy alternatives, such as homestays and rideshares. That might mean cheaper accommodations and transport options in some markets. And as WEX Travel points out, you can also potentially avoid foreign transaction fees, since a virtual payment card allows payments in local currencies. Additionally, a virtual payment card may offer better points or cashback than existing payment options, according to Business Travel Executive, making the switch even more attractive.
In a time when every little bit of money saved helps, it’s important to consider how streamlined and secure corporate travel payments impact the bottom line.
Enabling Airfare Price Tracking
For travel managers dealing with large business travel budgets, even a small percentage of money saved can have a huge impact. Airfare price tracking software is an excellent tool for identifying savings opportunities, but credit limits on the cards used for corporate travel payments can present an unforeseen obstacle.
Refunds for canceled flights can take up a month to be processed. In the meantime, that original flight purchase still counts against your credit limit. If you have software like our Faresaver platform that can rebook a better flight, but your card has no funds available, you’re out of luck. The money-saving flight has slipped through your fingers. And if that’s happening across your travel program for hundreds or even thousands of flights, it can translate to a major missed opportunity. To use a real-life example, we’ve seen an instance of $700,000 in savings missed due to credit limits being reached. After we reported this to the travel management team, FairFly started working with them to upgrade their payments infrastructure.
A virtual payment card eliminates this problem, thanks to its centralized nature and independence from any individual card or account. Without the constraint of credit limits, your software can rebook the flight and the savings are locked in. This advantage alone makes the virtual payment card a no-brainer when compared to a typical business credit card for corporate travel payments.
Considering the Switch
With UATP and other major industry players now offering trailblazing payment options, it’s worthwhile to take a moment to consider how a virtual payment card can benefit your organization in the long run.
The world of business travel is undeniably in disarray at the moment. But when it returns to normal, it can be a silver lining to find yourself working within a more efficient, flexible payment process that makes it easier to save money and stay within budget.