New technologies are disrupting old-guard corporate travel payment methods. They’re designed to make transactions more secure, bring data insights to decision makers and deliver a seamless experience for business travelers. How comfortable are you with what’s happening?
First, learn the electronic payments lingo
Virtual credit card: Card numbers are created per booking. Each number comes with its limit and can be confined to specific uses, such as spending with a particular merchant category or valid only within a set time frame.
Invisible payment: The supplier (think Uber) already has card numbers stored so travelers don’t have to present cards to pay for services or products.
Mobile payment: This is any payment made through a mobile device. It can be a digital version of a plastic corporate or personal card stored in a mobile device’s “mobile wallet.” Or it can be an automatically generated virtual card.
Central payment: The traveler isn’t responsible for the payment, instead it goes through a company’s central account. A lodge card is an example; virtual credit cards are also central forms of payment.
Contactless payment system: Travelers save time with tap-and-go features, waving their credit cards or mobile devices in front of contactless-enabled readers to make a payment.
Open banking: A secure way to give third-party providers access to clients’ financial information while bypassing bank transaction fees.
Instant payment: This real-time transaction uses a bank transfer to exchange money for products and services in seconds.
Now understand what’s coming
- 44% of business travelers worldwide currently make payments using mobile devices. But look to China as a glimpse into the future. Today 91% of Chinese business travelers already pay via mobile.
- 27% of travel programs use some type of virtual card according to research by the Global Business Travel Association.
- Starting on Dec. 31, 2020, remote electronic payments in the European Economic Area will require strong customer authentication (SCA), a two-factor authentication process. This new security process will improve the level of security for remote payments. However, this change brings some challenges because payment does not always occur at booking and the traveler could be traveling, driving or asleep when a SCA is required. That complexity is why the European Banking Authority pushed back its original deadline for SCA compliance. Watch for strong growth of central forms of payment in 2020.
- Virtual and mobile payments are combining to increase security and improve the traveler experience, while traditional payment methods (lodge cards and credit cards) are decreasing. The additional safeguarding required for SCA also will drive adoption of combined virtual and mobile payments.
- Open banking will expand. And new players will continue to bring innovative products and services to market.
BCD Travel is focused on helping corporate travel buyers navigate new payment technologies and create seamless and secure payment experiences for their business travelers. Ask how at email@example.com.