Business travelers at smaller companies don't always have access to the full complement of travel technology and tools that travelers from large companies enjoy. Some don't even have corporate cards, instead using personal credit cards to pay for business travel and requiring post-trip reimbursement by their employer.
Paying for hotel stays in such a fashion is a process that invites a lot of friction, said Letgo finance VP David Wieseneck, who runs the travel program for the digital marketplace provider for local sellers and buyers.
That unwieldy and contentious payment and reconciliation process led Wieseneck to participate in a beta test for travel management company TripActions' new Liquid payment product, helping Letgo find what Wieseneck hopes is a permanent solution for hotel payment.
Letgo has 320 employees, 100 of whom travel at least once a year, and about 30 who do so more than twice per year. Letgo only has two physical corporate cards, one in its New York office and the other in Barcelona, each used primarily for office expenses. "We don't like to give out multiple corporate cards to our executives because it's lot of time and effort to reconcile," Wieseneck said.
Traveling employees when checking in to hotels often had to present their personal cards and use them to pay for their stays. Afterward, they would have to request a reimbursement from the company. "We reimburse people through Expensify very quickly, but even if it takes you two weeks to get reimbursed, you're still fronting the company money," Wieseneck said.
To avoid using their own cards, travelers could fill out a preauthorization form to gain access to the Letgo corporate card, but that came with its own annoyances. Letgo would fill out the form with Wieseneck's corporate card info and ID and fax it to the hotel. Calling this process "old school," Wieseneck said hotel staff sometimes would forget they had the preauthorized company card and still end up charging the employee, who then had to request a reimbursement from Letgo. Prepaid hotel stays, however, came with the problem of no refunds for cancellations, he said.
Letgo wanted to get away from personal reimbursements for direct corporate spending. It's one of the reasons why the company two years ago signed with TripActions, Wieseneck said.
The Beta Test
In the summer of 2019, TripActions asked Wieseneck if he would be interested in beta-testing TripActions' Liquid. Designed to complement the TMC's all-in-one platform, the product uses a virtual card feature for pay-ahead services like flights and provides plastic credit cards for expenses incurred during trips and can set trip budgets and spending parameters.
Wieseneck saw a potential solution to his program's aching hotel problem. "I wanted to solve the hotel problem so employees [can check in] with a TripActions-branded card with their name on it and feel comfortable that when they check out, all the charges will get paid for by the company," he said. "For me it was, how do we solve the hotel problem so our employees don't have to front the money?"
Wieseneck selected the travelers he trusted most to test Liquid. Throughout the beta-testing process, he was in contact with TripActions' product team, sharing his feedback and keeping the test under wraps. "We beta-tested with for six months, and in that six months they really built the entire product," Wieseneck said.
Before they hit the road, travelers either were mailed a plastic card—a five- to seven-day process, Wieseneck said—or were enabled to use Liquid via their mobile phone's wallet. Letgo allowed access between the day before the traveler's flight to the day after their scheduled return. The plastic card has a spending limit and can be used only for hotel and restaurant expenditures, as well as Uber and Lyft, but not taxis. Letgo participates in Uber's and Lyft's business programs via TripActions, Wieseneck said.
Benefits for Accountants, Not Just Travelers
His travelers were happy with the new option, Wieseneck said, as they didn't have to put down their personal cards. And since travel spending reconciliation processes took less time, there was a bonus for Letgo's accountants.
"Beforehand, my credit card was used for all flights and all hotels, which meant when we get our credit card [statement] at the end of the month, we will have 100 transactions, and my accountants would need to go find receipts for all the transactions," Wieseneck said. "They would call hotels and log into the expense management system to download all these receipts. That would take four to five hours a month, and that's time my accountants were not doing other things." Now, TripActions issues one invoice per month with all virtual card and plastic card payments to Wieseneck, he said.
The new system offered safety benefits too, Wieseneck said. "If my corporate card gets stolen or compromised, then I have to cancel the card number and get a new card number. That means I have to call up anybody that has my card and change it," he said. "If a virtual card gets stolen, it's limited to that one transaction." If a traveler loses a card, "I can get them another one. It only works when they are on their trip, so it's super-safe," he said.
With the card's spending controls based on a trip's start and end dates, Liquid automatically adjusts if travelers call TripActions support to change their flights. The feature also raised awareness of Letgo's travel policies. Typically, travelers learn what's in policy after they file an expense report, Wieseneck said, but now they learn in real time, because the card won't work on out-of-policy purchases.
"If you try to go to Home Depot to buy something, it won't work, but if you are at a restaurant or a hotel, it will," Wieseneck said.
Wieseneck declined to discuss the effect of adding Liquid on Letgo's pricing with TripActions, which is based on the TMC's standard $25 transaction fee. TripActions Liquid general manager Michael Sindicich in an email said that "we normally charge an annual platform fee for TripActions Liquid, however, given the economic impact of Covid-19 on our customers and partners, we are currently waiving the fee for the first year while still offering a competitive rebate back to the customer."
At the moment, Letgo's rollout of Liquid has been limited because of travel restrictions due to the coronavirus outbreak. Once it recedes, Wieseneck said he will roll it out to more travelers.