Virtual Credit Card (VCC)

Virtual cards present an alternative payment method. They have a number just like a traditional credit card, but their digital nature affords them many more features than the average plastic. In fact, they could soon become the preferred way to pay for some travel suppliers.

Virtual card technology provides flexible payment solutions, reconciliation efficiencies, and improved spend management. With single-use virtual cards, your organization can set parameters on a payment, assign a certain value to the card, and apply it to a certain transaction at a particular vendor.

Evolving payment technology

Before we dive too far into virtual payments, let’s understand what they are and how they work. Virtual cards are exactly like a traditional credit card, however they are fully digital. A virtual card payment is a one-time credit card number that can be used for a specific transaction, used during a pre-determined range of dates or amount and used only with selected vendors.

From the travel manager’s perspective, they often solve a few security issues, such as having one card number used for multiple transactions (possible fraud) or many cards out there that could be misused, lost or stolen – opening your organization up to a lot of risk. They specifically make great options for non-employee and guest travelers.

For travelers, a virtual card eliminates many hassles associated with travel spend. Travelers no longer have to worry about getting the proper authorizations, because they’re built into the card.

How can virtual cards help you and your program?

Reduce costs – Travel companies and their clients both benefit from virtual payments. Using virtual card numbers (VCNs) can reduce, and in some cases, eliminate fees – especially with cross-currency transactions and other similar fees associated with international payments.

Simplify reconciliation – When companies have many travelers, reconciliation of the data can be challenging and time consuming. Virtual payments are making that process easier by consolidating billing and reconciliation and tying payments back to a specific invoice. When traveler information is collected upfront, it saves hours of manual administrative time, resulting in improved reporting because data is more effectively captured.

Minimize exposure to misuse or fraud – Frequently, traditional accounts use one card multiple times for many suppliers by many full-time employees and guest travelers. This opens your business up to a lot of potential risk.

Virtual payments offer travel managers greater control by allowing them to set restrictions on single-use payments such as the amount, data and supplier. That way transactions are only processed if they meet the pre-determined specifications, minimizing the risk of misuse and potential fraud when using one corporate card.

The hospitality industry has been making headlines over the last decade, and not in ways that hotel managers particularly like. The prevalence of security breaches and credit card fraud have affected over 1,200 hotel chains since 2010 including major multinational names we’ve come to trust. While technology is evolving, so too are the abilities of tech-savvy hackers eager to access confidential payment and personal data.

Travel managers and booking systems are required to obtain a substantial amount of traveler information in order to create a more tailored booking experience. This information naturally includes the storage of credit card details even after the trip is complete. Adhering to security protocols and corporate travel policies may seem like the best way to prevent security issues, but hackers are 10 steps ahead of traditional “best practices” when it comes to accessing credit card details.

Many hotels have recruited cybersecurity firms to enhance data safety, and card holders are regularly encouraged to review their statements in detail for any suspicious charges. For travel managers, reconciling the corporate credit card has always been a common practice and historically revolves around monitoring multiple employees, their respective business expenses, and noncompliant spending. The threat of fraud in the travel payments space is just one more challenge for corporate travellers and travel managers to overcome.

Fraud-Proof Travel Payments

Technology may be enabling hackers but it has also been empowering travel payments innovation, with virtual credit cards emerging as the hero. When a virtual card number is created it’s done with a very specific and single-use goal in mind. The location where the card will be used and the amount that will be charged are both predetermined and pre-approved. If for any reason an unintended person gains access to the number and attempts to use it for any other purpose or amount, the charge would be automatically declined and the card number would instantly become invalid.

The ability of virtual cards to provide a secure payment alternative that is essentially fraud-proof and fail-safe against data breaches is a huge win for travel managers and hotels. The likelihood that another security breach will happen seems inevitable in today’s world, but that doesn’t mean we can’t protect ourselves and turn the tables on criminal activity. Companies using virtual credit cards for their travel payments are already resting a lot easier knowing they’re in full control of their data.

Travel Policies, Compliance, and Expensing

Virtual credit cards have also proved to be an ideal tool for enforcing company compliance policies on travel spending. Travel managers are able to set limits on approved purchases when the card number is created. They can also restrict and block charges in real-time through online platforms that are accessible on any mobile smart device.

Expense processing and reconciliations don’t have to become anxiety-ridden goose chases either. If there’s a $250 dinner bill that was charged to the room, managers no longer have to wonder if it’s legitimate. They also don’t have to question which employee picked up the bill and for what purpose. It would all have to be approved – or denied – in real-time. Expenses would be automatically tracked by employee, trip, or event with specific accounting data points that streamline reconciliations. No guesswork, no fraud concerns, no rogue employee spending.

Virtual cards give travel managers control, eliminate potential fraud risk, and innately reinforce travel policy compliance. That sounds like a real hero for travel payments to us.

Prepare for a digital future

Popularity and growth in the digital payments space is not going away anytime soon. Now is the time to learn more about this innovative solution to reduce costs, optimize the reconciliation process and gain greater control over your travel payment systems.