Virtual credit cards help drive travel rebound
There is no doubt that the pandemic has had a severe impact on the travel industry, and that includes the chaos it has caused for travel businesses as they struggle to process an unprecedented number of booking cancellations. and refund requests.
The huge delays in expediting these refunds highlighted great friction in the financial settlement processes of companies and their travel management companies who needed to ensure bookings and cancellations were aligned across the board. individual cardholder activity.
According to spencer hanlonGlobal Head of Travel Payments at niumAdopting a single-use virtual card strategy has emerged as a strong solution to streamlining the expense management process through digitization and automation of booking transaction reconciliation.
“[It’s] the ability to issue a number for a specific transaction and then program that number so it can only be used on a certain day, in a certain currency, for a certain frequency, for a certain amount, and you have a very controllable, a safe and universally accepted way to pay people around the world,” Hanlon told PYMNTS in a recent interview.
Read more: Nium offers virtual cards to the travel industry in the United States
The payment and card issuing company recently launched its virtual credit card (VCC) issuing tool in the United States, and Hanlon said travelers are benefiting from it for the same reasons as travel agencies, namely universal acceptance, flexibility and the ability to channel reimbursement in the event that what was planned does not happen.
These VCCs have not only eased friction in the business travel market during the crisis, he said, but they are also helping companies post-pandemic as a business choice in the industry.
“Using the card network specifically designed for this mechanism is a real assurance that you can handle these booms that we see today coming out of the pandemic, but also the difficult times when money flows in the other sense because these contracts cannot. be met for reasons such as the pandemic and closures,” he added.
Lack of education and priority
Unlike midsize companies, most large players are already aware of the opportunity VCCs present and are taking advantage of it daily to make their processes and systems more economically viable, efficient and smoother for the consumer, Hanlon said.
These household names are managing the downflow more efficiently through customer-friendly processes as they take advantage of the “unique career opportunity,” as well as the triple-digit percentage increases the industry is experiencing as the traveling public seeks to alleviate this. repressed request.
See also: The Nium and FINCI team to boost international payments
“If you can manage your cash [and] process so that you don’t have to hire people to handle that workload, you’ll be able to ride that wave much more efficiently,” Hanlon noted.
He said it comes down to a lack of education and prioritization, adding that companies that don’t make it a key strategic objective to get their operations fit for the current scenario are going to be challenged.
According to Hanlon, that’s why Nium has made it its mission to match that lack of focus – or ignorance – that may exist in certain pockets of the industry to the potential that these VCCs have to help companies better improve their processes and cash flow.
When it comes to the payments orchestration landscape, Hanlon said the biggest challenge is the complexity of international payment and managing local licensing and practices across multiple jurisdictions.
Therefore, the most successful players will be those who understand the complex and constantly changing regulatory environment, as well as the infrastructure and practices specific to each market, and can do the heavy lifting on behalf of their clients.
“It needs experts who understand and dedicate their time to ensuring this complexity is removed, and who can build an unparalleled network to move money quickly, efficiently and affordably with a high degree of visibility. and speed,” he explained. .
Those with this “superpower,” Hanlon said, will be able to propel businesses onto the world stage and help ease their worries about getting paid, paying their suppliers, and moving funds around quickly. the world.
“It’s Nium purpose,” he said, and even if it is a very big challenge, ” we are conquering [it] market by market, channel by channel, product by product, and our VCC offering is an example of how we can do this on a truly global scale.