Virtual cards are rapidly gaining popularity due to the opportunities they can bring while making the checkout process easier for users. When it comes to travel, they can eliminate the need for receipts and expense reports, and mitigate the risk of a dishonored payment.
Beyond that, they offer a host of other benefits and the potential to transform the way payments are made across the entire travel industry. With that in mind, Anjana hainescontent manager at The association of payments explores exactly how this can be achieved, addressing the impact of the pandemic, the need for education and more.
Imagine a world where business travel doesn’t involve numerous receipts, expense reports, or the risk of declined payment, but offers automated reconciliation and effortless record matching, plus the added benefit of a fingerprint. reduced carbon by not using physical hardware. plastic credit cards. Sounds good, doesn’t it? The growing popularity of virtual cards means that these opportunities can be seized today.
The strengths of virtual cards
One of the biggest strengths of virtual cards was highlighted during the covid-19 pandemic, when travel insurance allowed travelers to get their money back. The ability to make chargeback requests to refund money also demonstrated how virtual cards offered protections that other payment methods lacked. As several airlines went bankrupt or canceled flights, virtual cards allowed online travel agents (OTAs) to file chargebacks for purchases used to book flights.
david robinsonCOO and Deputy General Manager of Pax2pay comments on the evolution and use of virtual cards in the travel industry as part of an upcoming white paper from Payments Association:
“During the pandemic, we have never seen anything like it. When [airline] Monarch and [travel agency] thomas cook collapsed it was hard. However, nothing prepared us for what was to come with regards to the covid pandemic. We were processing literally thousands of chargebacks a day. The media was full of reports of airlines not issuing refunds or issuing credit notes. With chargebacks, a lot of people got their money back. Many businesses are now seeing the benefits of this, so they want to use virtual credit cards as their primary payment mechanism, knowing the protection is there and they can use it if they need it if the airline doesn’t provide the service.
What are the obstacles ?
A business considering using virtual cards will need to update processes, rewrite company policies on card usage and spending, and consider how to integrate any new solutions with their existing expense management, accounting or enterprise resource planning (ERP).
Supplier acceptance can also be a sticking point. Some providers may be reluctant to abandon tried and trusted payment methods, concerned about merchant service fees associated with the cards or their impact on settlement terms.
However, fears about onboarding new solutions and cost issues disappear when the benefits of accessing better payment processes, actionable data insights, and effortless compliance are clearly explained. With the right guidance and expertise, businesses can get started with a virtual card solution that meets all of their needs.
SMBs that have had good experiences with virtual cards are much more likely to tap into additional financial solutions that could further help them grow their business.
Exploit the opportunities
To capitalize on these opportunities, issuers, financial institutions and payment platform providers need to educate and encourage businesses to seize the moment. By showing the tangible and immediate benefits of virtual cards and dispelling unwarranted cost concerns, solution providers can help companies deepen employee and supplier relationships, strengthen their foundations, and position themselves to leverage of all the opportunities that come their way.
The importance of teaming up with the right expertise cannot be overstated. Collaboration can provide the fastest route to market. It draws on complementary skills and strengths and offers companies the smoothest implementation of new solutions and the widest choice of value-added services.
As businesses across multiple industries see the tangible benefits of digitizing payment and operational processes, virtual cards are rapidly gaining traction. The future of virtual cards has never been brighter.