Carlson Wagonlit is the latest travel management company to offer a single-use virtual card program for paying certain travel expenses following the announcement last week of a partnership with Conferma.
CWT senior director of global card products Clive Cornelius told BTN that the TMC has been working with the payment technology provider for about a year and that clients initially will use the product "for hotel and low–cost carriers—across all markets and banks."
How It Works
Generating virtual cards for low-cost carriers is "much simpler" than for hotel reservations, according to Cornelius. For flights, CWT generates a virtual card at the time of booking by connecting to Conferma's technology. So that travelers can't use the cards for anything other than the specified transactions, CWT programs the cards with such controls as value amount, validity dates and merchant category codes.
As with regular hotel bookings, CWT inserts the single-use number in the booking so the hotel can use the virtual card as a form of guarantee, Cornelius explained.
"What isn't available via the [global distribution system] today is the ability to tell the hotel that his card should be used for payment as well as a guarantee," he said. "That's something we want to work with the GDSs on so we can enhance the normal booking capability, so that all of that becomes a standard booking process."
In the meantime, CWT faxes to the hotel properties the details and specified use of the card, according to a client's travel policy—for example, just the room, room and breakfast or all costs, explained Cornelius.
Because the cards are aligned with each individual transaction, the reconciliation process is easier than with traditional lodging card products, Cornelius claimed.
"We were finding that clients were looking for a solution that enables central payment, like lodge or [business travel account] cards that we use for air travel, but they wanted to extend that capability to include hotel and other content in the future," Cornelius said.
The new virtual card capability is available to all CWT clients worldwide, with 30 clients already using it. Use incurs an additional cost that is negotiated on a client–by-client basis. Clients can use their own bank and card issuer or, depending on their geographical location, use CWT's card provider. However, the use of CWT’s card provider is limited to certain markets, including Europe and some countries in Latin America and Asia/Pacific, according to Cornelius.
Virtual Possibilities
CWT is exploring the ability to link the virtual card to its mobile application. Should the hotel misplace the fax holding the card details, travelers at check-in and checkout can present the information on their smartphones.
"It's part of our 2015 plans … so no firm timeline for delivery for the card piece, but we may work on interim steps so we have something available to the traveler in the meantime as we work out that integration," Cornelius added.
The TMC also will work to expand the virtual card's scope, including use with network airlines. When asked if car rental bookings would be accommodated, Cornelius said those transactions are "slightly more difficult" for several reasons. For one, the financial risks are higher. A car rental company stands to lose a $40,000 car if someone drives away with it, compared with someone skipping out on a couple of nights' stay worth $300 to $400, Cornelius explained. Then there's the issue of insurance in the case of a car accident.
"If the policy taken out means the first $1,000 of damage would go on the card and the way we create the virtual card is you set the limit based on what the booking value is, how would they be able to attribute the $1,000 excess if [the traveler] were to have an accident?" Cornelius asked. "We want to work closely with all the main players in the car industry and work through how we can make this work and how they can take this as another form of payment."
Increasing Adoption
Initially CWT assumed the solution would be best for such industries as energy, resources and marine, in which employees are based in locations where companies "don't necessarily want to issue corporate credit cards," Cornelius explained.
However, CWT found that the need extended across companies in all sectors and industries that have travelers who are not issued corporate cards.
Educating potential clients will take some time. But knowledge and adoption of this type of product is increasing, especially as other banks and card network suppliers begin launching their own virtual payment solutions.
BMO in July announced it was piloting a MasterCard virtual solution in the United States. Adelman Travel Group and Christopherson Business Travel separately also collaborated with individual clients to create their own virtual payment offerings.
"The coverage is the main thing that needs to grow," Cornelius said. "I think that with someone like CWT adopting and offering it to the breadth of clients we have can help with the level of interest and usage and therefore expect [the] number of card providers and banks that offer virtual card products to increase and the number of markets they offer to also increase. For us, it's about the ability to offer a solution that's agnostic of the GDS we're using to service client and agnostic of whatever bank or card provider [the client] wants to work with."