Better B2B Travel Payments Through Virtual Wallets

Old habits die hard. But streamlined payments are becoming a key attraction of using technology to help supply chain efficiency, which, of course, helps drive cash flow across virtually any industry.

In the travel industry, specifically, old habits may die a bit harder. The phone call, the paper check, the credit card number along with security codes — time-honored ways to get suppliers paid but hardly hallmarks of speedy payments, either sending or receiving them.

To that end, Amadeus has launched virtual cards serving the travel industry, with two offerings being rolled out across Europe under the umbrella of Amadeus B2B Wallet Prepaid.

The virtual cards, as part of a portfolio, offer two distinct choices for agencies, both impacting cash on a transaction-by-transaction basis. One card lets agencies earn a rebate on amounts they spend in service to the business, while the other card helps agencies avoid some of the charges that can be levied by some suppliers.

In an interview with PYMNTS, Celia Pereiro, head of Amadeus’ travel payments business unit, said that the cards themselves offer businesses the potential to decide how cash savings can be utilized as they deal with suppliers as the two cards are linked to the same account and can be used interchangeably, up and down a supply chain that is typically marked by, for example, car rental agencies and hotels. And, in certain regions of Europe, she noted, cash-back rewards may be limited, so opting for charge avoidance may be a better fit.

Traditionally, B2B payments in the travel industry have relied on the use of a card such as a Visa card, said Pereiro, which may have worked well through conduits such as the IATA Billing and Settlement Plan and have been used specifically for airline bookings, she added. But there remains a “need to work with other suppliers as well,” she said.

Among the features specific to the cards, said Pereiro: enhanced security, which helps safeguard against fraud and helps reconciliation, with a single-use card and ticket number being applied to each transaction, making tracking easier, especially for smaller agencies that may operate with several separate bookings at once.

And what of the travel industry at large and the movement toward virtual cards? Pereiro stated that, as Amadeus has noted in the past, 20 percent of agencies profess to use virtual cards. “The focus has been turning increasingly toward B2B,” whereas it had traditionally been focused on B2C.

And with the travel industry being marked increasingly by consolidation, she told PYMNTS, one key focus for her firm will be increased efforts in education, as studies have shown that more than half of travel agencies aren’t familiar with virtual cards at all — a notable gap, she said, in a “B2B market that is big but where agencies are not using” the cards.