The pandemic-induced travel restrictions and economic downturns have posed significant operational challenges for Travel Managers and Travel Management Companies (TMCs). Dealing with a surge of canceled flights, refunds, and unused air tickets amidst reduced budgets has been a daunting task. However, amidst this disruption lies a unique opportunity to rethink existing travel programs and explore new strategies for cost-saving and streamlining corporate travel payments.
The Rise of Virtual Payment Cards
In recent years, the corporate travel industry has witnessed a surge in new tech-enabled payment options. Leading players like UATP, TripActions, and even Sabre and Visa have launched virtual payment solutions.
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 virtual payment cards so appealing? Unlike traditional corporate credit cards with fixed credit limits and restrictions, virtual payment cards offer centralized lines of credit, providing greater flexibility, enhanced data visibility, and compelling cost-saving opportunities. These benefits, coupled with innovative platforms like Oversee’s Faresaver Air Price Assurance solution, translate into significant savings and efficiencies for corporate travel spend.
Greater Spending Control and Accountability
Virtual payment cards are unique because you can configure them for specific uses, vendors, locations, and time frames. This makes management tasks like ensuring compliance and reconciliation more efficient and straightforward. Since those restrictions are built into the card, you never have to worry that an employee used funds for expenses outside corporate travel policies. Fraudulent activity is less likely given these limitations, and the card number issued is temporary and virtual, unlike the usually designated account for corporate travel payments 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. According to Business Travel Executive, a virtual payment card may offer better points or cashback than existing payment options, making the switch even more attractive.
In a time when every little bit of money saved helps, it’s essential to consider how streamlined and secure corporate travel spend impacts the bottom line.
Enabling Airfare Price Tracking
For Travel Managers dealing with significant business travel budgets, even a tiny percentage of money saved can have a considerable 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 to a month to be processed. In the meantime, that original flight purchase still counts against your credit limit. If you have software like Oversee’s Faresaver Air Price Assurance solution 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 significant 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, we started working with them to maximize travel savings with Oversee’s Travel Spend Optimization solution.
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 makes the virtual payment card a no-brainer compared to a typical business credit card for corporate travel payments.
Considering The Switch
With industry leaders like UATP offering pioneering payment solutions, organizations are encouraged to explore the benefits of virtual payment cards. While the business travel landscape remains uncertain, embracing efficient and flexible payment processes can pave the way for cost savings and budget compliance in the long run.
In conclusion, while the current state of business travel may be tumultuous, adopting virtual payment cards promises a silver lining—a more efficient, adaptable payment ecosystem that fosters savings and financial resilience amidst uncertainty.
