There is no question about the severe impact the pandemic has had on the travel industry, and that includes the mayhem it caused travel businesses as they struggled to process an entire number of booking cancellations and refund requests.
The huge delays in expediting these refunds exposed a big slip in the financial settlement processes of corporates and their travel management companies that had to ensure that bookings and cancellations were aligned against all the activity for the individual cardholder.
According to Spencer Hanlon, global head of travel payments at Nium, adopting a single-use virtual card strategy has emerged as a strong solution to streamline the expense management process through digitizing and automating the reconciliation of booking transactions.
“[It’s] the ability to issue a number for a specific transaction, then to program that number so that it can only be used on a certain day, a certain currency, for a certain frequency, for a certain amount, and you’ve got a very controllable , secure, universally accepted way of paying people around the world,” Hanlon told PYMNTS in a recent interview.
Read more: Nium Offers Virtual Cards to US Travel Industry
The payments and card issuance firm recently launched its virtual credit card (VCC) issuing tool in the United States, and Hanlon said travelers get to benefit for all the same reasons as travel companies, which is universal acceptance, flexibility, and the ability to channel money back in the event what was planned didn’t occur.
These VCCs have not only eased friction in the business travel market during the crisis, he said, but they are also helping businesses post-pandemic as activity picks in the industry.
“Using the card network that was specifically designed for that mechanism is a real reassurance that you can handle those booms we are seeing today as we come out of the pandemic, but also the challenging times when money is flowing the other way as those contracts cannot be fulfilled for reasons such as the pandemic and lockdowns,” he added.
Lack of Education and Priority
Unlike midsize firms, most large players are already aware of the opportunity VCCs present and are capitalizing on them daily to make their processes and systems more economically viable, efficient and smoother for the consumer, Hanlon said.
These household names are managing the downflow more efficiencies with client-friendly processes as they take advantage of the “once in a career opportunity,” as well as the triple-digit percentage increases that the industry is experiencing as the traveling public looks to relieve that pent up demand.
See also: Nium and FINCI Team to Boost International Payments
“If you can manage your cash flow [and] processes so that you are not having to hire people to handle that workload, you will be able to ride that wave much more efficiently,” Hanlon noted.
He said it boils down to a lack of education and priority, adding that businesses that don’t make it a key strategy focus to have their operations fit for the current scenario are going to be challenged.
According to Hanlon, it’s the reason why Nium has made it a mission to compete against that lack of focus — or that ignorance — that may exist in certain potential pockets of the industry to the industry that these VCCs have to help companies to better improve their processes and their cash flows.
When it comes to the payment orchestration landscape, Hanlon said the biggest challenge is the complexity of paying internationally and dealing with licenses and local practices in multiple jurisdictions.
As a result, the most successful players will be the ones who understand the complex, ever-evolving regulatory environment, as well as the infrastructure and practices that are specific to each market, and can do the heavy lifting on behalf of their customers.
“It needs experts who understand and dedicate their time to ensuring that complexity is removed, and who can build a network that is unrivaled in moving money quickly, efficiencies and at an affordable cost with a high degree of visibility and speed,” he explained .
Those who have that “superpower,” Hanlon said, will be able to boost businesses onto the global stage and help ease their concerns about getting paid, paying their suppliers and moving funds rapidly around the world.
“That’s Nium raison d’etre,” he said, and even though it’s very a big challenge, “we are very much in the throes of conquering [it] market by market, channel by channel, product by product, and our VCC offering is a case in point of how we can do that on a truly global scale.”