Resisting the allure of other payment verticals, payment provider AirPlus International as part of a recent annual business review revised its strategy to focus solely on business travel, managing director and chairman Patrick Diemer recently told Business Travel News.
"Sometimes we're tempted to go outside of business travel management—we've discussed p-cards and fleet cards—where payments are interesting and we think we can add value, but one of the key elements of our strategy is to continue in business travel management," Diemer said. "When I look at the business travel market [from the perspective of] an independent company—not a bank or a [travel management company]—that's just doing T&E cards, we believe there's a significant opportunity for us across the globe."
To reinforce its commitment to the sector, AirPlus is putting its money where its mouth is and committing up to roughly $10 million annually on an ongoing basis to improve the quality of its products. "There's a significant cost involved to invest in data quality," Diemer said.
Because of the continued investment, Diemer said, AirPlus is not the right option for customers seeking solutions based on the "best price." However, "if customers are looking for the best quality around in the market, then we can make an offer that will be compelling," he added.
Some of the funds also will go to improving AirPlus' Information Manager analytics tool, which allows travel managers to evaluate corporate card and account data based on such factors as cost centers, projects or flights.
With Information Manager, travel managers can access corporate spending data through a dashboard. Clients can create customized reports or use 25 standard reports, Diemer explained. The product previously was free for clients, but AirPlus two years ago began charging for it.
"We're also taking the decision to invest further into a new generation of analysis, which we're not ready to launch yet, but it's clearly an area where we are distinguishing from the competition," Diemer added.
While data analytics for airline expenses are "already outstanding," according to Diemer, in other merchant categories—in particular in the lodging and ground transport spaces—there is a "massive opportunity to increase data quality."
"Even superficial information, like how many room nights [a traveler] stayed when he or she checked out, is not readily available by MasterCard and Visa," Diemer explained.
Advancing Mobile Wallets
Smartphones, Diemer believes, may be the "key driver" to improving data quality and AirPlus has been piloting several mobile applications. AirPlus in June 2013 began piloting the MyWallet mobile wallet with Deutsche Telekom using the telecom company's near-field communication technology and the AirPlus corporate card.
More than 200 Deutsche Telekom employees use the tool in 14 countries, and more employees continue to join, Diemer claimed. AirPlus plans to release the product first in Germany in mid-2015.
"We gained a lot of experience in this project, and we're building upon this now to offer a scalable mobile payment solution soon," Diemer said. "To make this market solution not only very convenient and easy to use, but also [with] a security level that complies with a business customer's needs, some technical developments are right now being undertaken."
AirPlus six months ago also began a "very limited" pilot with its own employees to pay for taxis using quick-response codes, Diemer revealed.
The payment provider in April 2013 launched its AIDA one-time-use virtual card product on mobile platforms in the United Kingdom and Germany and more European countries later that year. AirPlus also has been working on bringing Mobile AIDA to the United States, but has faced licensing issues.
While Diemer acknowledged that not many people today use mobile wallets, he also said Apple Pay—Apple's near-field communication-enabled mobile payments feature, announced Sept. 9 and embedded in the new iPhone 6— is "big news" and predicted it would boost adoption of e-wallets in the business travel sector.
"We believe the smartphone will become the payment tool of business travelers," Diemer said. "Travel managers will be swamped by demand [from travelers] to allow them to use mobile wallets. It's completely unavoidable and positive for business travelers, and travel managers can gather more data."
How long before we see business travelers tapping their smartphones to pay for T&E? Diemer said that networks and merchants first would need to upgrade their infrastructure to enable such transactions, but he estimated it would take about five years.