ABTA’s Webinar on 6 August unpacked current trends and developments around Virtual payments for travel expenses, and given that Southern Africa is the fastest growing region in relation to virtual payment, this could not have come at a better time.
An expert panel of banking, finance, corporate and supplier experts lead the discussion, addressing how Travel Buyers can better approach incorporating virtual payments into their travel programmes, and how suppliers can make the most of this payment option.
Our panel consisting of Beverley Muller, Training Manager – Tsogo Sun Hotels, Chris Wood, Executive: Card Issuing & Payments – Nedbank, Julie Hayes, Product Manager Commercial Issuance – Absa, Kim du Plessis, Regional Sales and Implementations Manager – Tourvest Travel Services, Richard Whitfield, Travel & Procurement Specialist – T-Systems and Xolani Dladla, Head: Accounts Receivables – Avis shared the following insights:
1. Why Suppliers should jump on board
For Suppliers that are currently resistant to accepting virtual payment options, there are a few key benefits that need to be reiterated.
Firstly, virtual payments secure payment immediately, as the virtual card number is processed at the point of sale. This means that instead of waiting for payments to be made via EFT by the client, or cash or card when the traveller utilises the service, that payment hits your bank account immediately. Given the cash flow challenges that many suppliers deal with – specifically smaller B&B’s in the accommodation space, this provides a great benefit.
Secondly, virtual payments, although a fairly ‘new’ concept, is here to stay. Due to the myriad of benefits that it offers to corporate and government clients, the uptake has been strong, and for suppliers to stay competitive, shying away from this option could negatively affect their bottom line in the months to come.
2. Manual versus Automation
Currently, suppliers and buyers agree that processing of virtual payments can be very time consuming as many processes need to be manual. With other payment options, several transactions are billed on one invoice, but virtual payments are different as each transaction carries its own virtual card number. This also means that strict quality control measures need to be made by suppliers due to the risk of finger-errors when processing sometimes thousands of virtual card transactions.
Financial Service Providers agree that much is changing in the world of virtual payment and although the processes up until now have been very manual and resource-heavy, payment providers are working with both supplier and TMC partners, as well as clients, to develop more automated systems.
Until this is a standard, Suppliers agree that finding a way to ring fence virtual payments and create internal processes for printing, processing and quality checking transactions is well worth the effort, given the benefits to cash flow. Options do also exist for loading two payment profiles per client – one for the initial transaction using virtual cards, and one for incidentals and extra’s, using an alternative payment method.
3. One size does not fit all
As with many new products and services, it can sometimes feel that there are limitations and that suppliers try to push a one-size-fits-all approach on clients.
However, payment providers and TMC’s agree that his is no longer the case with virtual payment and that many alternative, bespoke solutions are being strategised and developed in partnership with clients who have specific requirements. In addition, virtual payments are able to integrate into many different platforms, and are not limited to specific self booking tools.
4. Weighing up the pro’s and con’s
As with any new product or service, Travel Buyers need to weigh up the pro’s and con’s before making their decisions.
Virtual payments offer several key benefits to Corporate Travel programmes including better reconciliation, budget management, spend controls and data capturing and possibly most importantly, far reduced (if not zero) fraud as each virtual card number is issued for a specific amount to a specific supplier.
On the flip side, investigation will need to be made into changing processes and potentially investing in technologies that will see higher automation, in order to alleviate a back office resource drain.
5. Engage, Engage, Engage
Once understanding the benefits of virtual payment, Travel Buyers are encouraged to reach out to their TMC and FSP partners to understand how these benefits can be applied to them, in what way the solution can be customised for their requirements, what their TMC and FSP is doing to invest in automating processes, and what investment will be required from them.
Our panel agree that education and engagement between all parties to fully understand the benefits and help clients deal with challenges and misconceptions is a vital element to move virtual payment adoption to the next level.
If you missed this webinar, you are able to listen to it online HERE.
This resource is free of charge for ABTA Members and non Members pay R 250 ($15).