Interview: Conferma Business Development Director Of The Americas Andres Rojas

Conferma in January appointed Andres Rojas business development director of the Americas, charged with expansion into Latin America. Rojas began his career at BCD Travel, where he was director of technology for 10 years, and most recently spent three years at Concur as director of business development and strategic alliances in Latin America. Based in Atlanta, he's been meeting with travel management companies, online booking tool providers and other potential partners in Brazil to deploy Conferma's first virtual card there as soon as April. BTN's JoAnn DeLuna recently spoke with Rojas. An edited transcript follows. 

How do you see Latin America's payments landscape?

Our main focus this year is Brazil. Brazil's total corporate air spend in 2014 was R$18.2 billion ($56 billion), and hotel was close to R$13.5 billion. We're also starting to focus on opening the market in Mexico. Those are the two largest economies and which move the largest volume for the region, so it makes sense for us to tackle those two countries.

What challenges do you see?

Brazil is a very particular market, not only because they speak a different language [from the rest of Latin America], but also because it's the biggest economy in the region. Brazil has the perfect storm for what we're trying to accomplish with virtual payments because of three main factors. The first is credit card fraud. It's not only in Brazil, but because of the size and complexity of the market, it opens up for a number of vulnerabilities that may not be so evident in other developed markets like the United States or Europe. Travel management companies in particular are a primary target for fraud because of the complexity of the processes they follow in the payments. Second, content is coming from many different sources in Brazil. Content is very fragmented, particularly when it comes to air and hotel. There's some content on the global distribution systems, but the majority of hotel content is not, so it is booked through different channels. That creates a complex scenario to process hotel payments.

Why isn't the content in the GDS?

That's been the case for many years. One factor is that it's expensive for smaller hotels to pay the distribution fee. Lots of hotels don't have the technology to access the GDS or are not that technologically savvy, especially when you start getting outside of the bigger cities and into the smaller towns, which a lot of multinationals do. [The smaller hotels] have basic reservation systems where someone is sending them faxes or calling.

What's the third reason Brazil is ripe for virtual payments?

Around 80 percent of hotels [in Brazil] are paid by invoice. The market is still reluctant to [employ] credit cards for many reasons, so most hotels are being paid by invoice by the TMC. Lots of processes are being done manually today to the point that there are companies in Brazil that dedicate [themselves] mainly to hotel invoice reconciliation. What virtual payments bring is for all that information to be tracked in one single transaction. TMCs in Brazil also serve as a bank for the customers because they need to prepay and invoice hotels then go back and invoice the client. The cash flow is very slow. Sometimes TMCs sit on millions of dollars in accounts receivables. The other benefit [Conferma] can bring to the picture is to accelerate that cash flow.

Will virtual payments make companies more open to the concept of corporate card programs?

Absolutely. What virtual payment does is eliminate a lot of the barriers credit cards have in the region when it comes to fraud and abuse from cards. Virtual payments will grow the penetration of credit cards. There's going to be a market for both. Customers may see a benefit for using regular corporate cards for some of their travelers, but we will also see all the benefits of bringing virtual payments for the process they have.

Conferma CEO Simon Barker has been promoting the concept since 2008, but only in the past couple years have virtual payments become more prevalent. Will it take as long for them to catch on in Latin America?

It's definitely going to be faster. We already have the key partnerships in Brazil that will help us start issuing cards this year. The work we've been doing in Europe and the U.S. will translate into this region—not only the experience but also partnerships. We hit the ground running with Brazil because we already have the partnerships with global TMCs. Carlson Wagonlit Travel, BCD Travel and HRG are some of the ones we already have global agreements with, and they're functioning in every market in Latin America. These are global TMCs that are already familiar with the product and have implemented it in other regions. This helps facilitate the penetration of the market. We're working with Bradesco, one of largest banks in Brazil.

What lessons can you apply from Europe and the United States?

We bring the best practices, but some of those need to be adapted to the particularities of this market. For example, the implementation experience we've gained from those markets translates perfectly into Brazil because the TMCs have similar processes. We also do a lot of education with hotels and partners, and that translates well into these markets.

Any other challenges?

One of the things particular to Brazil is the fragmentation of content. The payment process needs to be integrated with different channels of content: with the GDS, online booking tools [including] global, local and domestic booking tools, and different points of sale used in the market.

Are you targeting each online booking tool to become partners?

Yes, we are. We already have a partnership with Sabre, and through that we have a partnership with GetThere, which is already available. A [few] weeks ago we announced a partnership with Argo IT, the largest online booking tool in Brazil. It's [white-labeled] by companies like BCD Travel, CWT and HRG.

How does the competition look?

Right now we're the only ones in the market doing virtual payments the way we're doing it. Yes, we have the virtual card program, but we also have the ecosystem of the partners, which is really the core of the business, the integration we have with all those partners, the connectivity we have with all the channels of distribution.

Will you put those Brazilian reconciliation companies out of business?

No, I don't think so. There are still a lot of processes done manually. There is a reason for them to exist. With some of them, we're talking about ways for us to integrate, work together and offer different solutions. As a part of our platform, Conferma has a strong data-reporting tool and can integrate directly with the TMC's back-office system or reporting system via automated data feed. With the help of banks we're giving the TMC information right away.