Video game publisher Riot Games considers itself a young
company, as the age of its roughly 2,200 employees, based in 14 countries,
averages 24. "The company doesn't really want to give corporate cards to a
lot of them," Riot Games global travel head Sean Parham said.
About 400 of those employees travel for work, 35 percent of
them internationally. "A lot of them don't have credit, and they're
running around with debit cards," Parham said. So at the beginning of the
year, the company implemented AirPlus International's Virtual Account with Wex
Bank to pay for hotels, which account for $8.5 million in annual spend.
Parham, however, is disappointed with AirPlus' lack of aid
in getting more hotels to accept its solution, despite requests for help. "When
we first started down this road, they basically told me that it was on me to
get the hotels to accept the payments. I did that with our preferred hotels. …
[AirPlus] did little more than provide verbiage to share with the hotel
management."
About half of Riot Games' AirPlus Virtual Account hotel
transactions go through, and non-U.S. transactions are rejected about 90
percent of the time, according to Parham.
Parham requested that BTN not
reveal Riot Games' name when providing AirPlus the opportunity to
respond to his comments, though he said the payment provider was "fully
aware of my position." Yael Klein, head of AirPlus International and
president and
CEO of the Americas, said it was hard to respond without that
information but that, "we try to work very closely with both customers
and TMCs to make it a smooth process." She acknowledged that virtual
cards still present challenges, but also said the situation has improved.
"I don't want to downplay it. … There's still a
handful, and every handful is too much for transactions where it didn't work. I
get it, because the traveler feels lost at reception. But it has improved
significantly. Ten years ago, no one knew what a virtual card was," Klein said. In 2015, AirPlus processed more than 1.3 million virtual
card transactions for hotel rooms and the vast majority of the bookings had no
issues, she added.
Virtual Card Innovations
May 2015
Hotel Technology
Next Generation releases the Virtual Payment Cards Specification standard to
help hotels distinguish virtual card numbers from traditional cards and process
them without faxing.
July 2015
Choice Hotels International
enables travel managers and travel management companies to enter a code into a
certain field during booking to indicate that a card number is a virtual card
and that Choice has authorized the client.
September 2015
GraspPay enables
bookers to use virtual cards to buy air and hotel through the global
distribution system or corporate booking tool without paying a transaction fee.
June 2016
City Hotel Express
becomes the first chain in Mexico to process Conferma virtual cards without
requiring fax authorizations.
December 2016
Will virtual cards
merge with mobile wallets?
Trouble Spots
"What I really need help with is nonpreferred hotels
and international hotels," Parham said. "We have a Hilton in Tokyo
that is pushing back on normal authorization because the traveler doesn't have
the same credit card in hand when arriving at the front desk. [Hilton] told my
travel coordinator that if she would book it through Expedia, they would accept
that payment." Riot Games has gone as far as indemnifying the hotel from
charges and chargebacks in the case of fraud, something virtual cards are said
to reduce or eliminate, but Parham said the Hilton in Tokyo continued to refuse
the payment method. Parham spoke with Hilton Worldwide but was told the company
does not accept virtual payments because of liability. "That means that
none of these [virtual card] providers, not just AirPlus, are really doing much
to bridge the gap ... with the big chains to make this happen," he said.
Las Vegas hotels also have posed obstacles for Riot Games.
Parham said MGM properties, where Riot Games books most of its Vegas rooms,
require virtual card authorizatiosn to be signed and returned on the hotel
company's own form. That's an extra step that virtual cards are supposed to
eliminate. "I have been arguing with MGM International about this for
months with no success," Parham said.
Hotel companies that are not part of Riot Games' program,
such as Marriott International, also have been challenging. Marriott requires
corporates to use the hotel company's own authorization form to complete a
virtual card payment.
Hilton and Marriott declined to comment on their plans for virtual
card acceptance. MGM Resorts International could not be reached for comment.
"This goes far beyond AirPlus and Wex," Parham
said. "This is really between the card providers, aka the banks, the GDSs
and the hotels." While jaded by his frustrating experiences, Parham is not
ready to give up. Riot Games will require hotels to accept AirPlus Virtual
Account as part of its upcoming request for proposal process in August or
September. Those hotels with which Riot Games has had long-term relationships
likely won't have a problem with the RFP requirement. "It's the others …
that we struggle with," he said.
Industry Solutions
The payments industry is well aware of the virtual card
acceptance issues and the outdated and yet nearly universal requirement to fax
a credit card authorization to each hotel for each booking made with a virtual
payment. Travelers often are stranded when faxes are lost or misplaced. From
payment providers to hotels and from GDSs to startups, the industry has taken
steps to remedy and advance the situation.
To decrease lost faxes, providers like Wex and CSI have
created solutions that automatically fax authorization forms days before
check-in and again on the arrival day. Others have apps that allow a traveler
to refax the authorization form with one click and show a digital version of
the card at the front desk. Sabre vice president of virtual payments Neil Fyfe
said his company is working on a solution like this within TripCase, Sabre's
itinerary management app.
But such solutions can be a burden for smaller hotels.
Parham realized that on one day, 42 Riot Games travelers were checking into the
same small hotel. The AirPlus/Wex solution generates a fax two days before
check-in and on the day of check-in, which would have resulted in 84 faxes. "For
some of these hotels, we put in thousands of room nights a year. That's a lot
of faxes," Parham noted.
The goal is to eliminate the need for faxes. In May 2015,
Hotel Technology Next Generation released the Virtual Payment Cards
Specification standard to help hotels distinguish virtual card numbers from
traditional cards and process them without faxes. But HTNG COO David Sjolander
said adoption would take several years. "Because the standards are open to
the public, we often don't know when they have been implemented. The head end
of the process for corporate travel will be the GDSs," Sjolander said in
April. "I tried to get information from them about six months ago but was
unsuccessful."
Several other suppliers have taken matters into their own
hands. In July 2015, Choice Hotels International released its own remedy that
allows a travel manager or TMC to populate a field during the booking process
with a code that indicates a card number is associated with a virtual card and
that Choice has authorized it. This eliminates the need for a fax authorization
and the need to request a physical credit card from the traveler. The solution,
however, is limited to Choice hotels or properties that use Choice's SkyTouch
cloud-based property management system.
In June, City Express Hotels became the first chain in
Mexico to process Conferma virtual cards without requiring fax authorizations.
Conferma delivers the virtual card numbers to the hotel through a direct
connection to the application programming interface of Conferma's Hotel Booker
platform. Conferma already had fax-free capability with Premier Inn in the
United Kingdom through a similar connection. The solution was feasible because
City Express Hotels has a cloud-based system that allows it to update all its
hotel reservations systems simultaneously.
"My mission over the next few years is to figure out
universally how to eliminate the fax," said Grasp Technologies vice
president Dave Lukas. "We're talking with a few hotel partners on it now."
He said Grasp has the ability to send the card data now through its Secure
Connect system, but "some hotels won't let us do that directly because
maybe they don't want us behind their firewall or don't want us to connect to
their system."
Meanwhile, credit card networks began enabling
mobile wallets for corporate card use last year, and the possibility to merge
virtual cards with mobile wallets may be closer than imagined. Combining both
technologies is "definitely something that is under review" at Sabre,
according to Fyfe. "Virtual payments pushed out to mobile wallets is
something we should look forward to in the not-too-distant future," he
added
EDITOR'S NOTE: Aug. 2, 2016. The context around AirPlus president and CEO Yael Klein's initial comments in this article has been updated to reflect more accurately her conversation with this Business Travel News reporter. BTN regrets any misrepresentation, which was unintended.