What’s the next step a company should take in the evolution of corporate travel? According to Richard Crum, Group Head, Global T&E Products & Solutions, MasterCard, it’s to implement individual virtual card accounts. That very step, he says, will boost travel expense management, allow for better travel data collection, and more effectively prevent fraud. In a recent interview with MPD CEO Karen Webster, Crum elaborated on how linking every part of the value chain together, with the right solution, helps companies more seamlessly manage the corporate travel process.
KW: MasterCard recently announced that Conferma, a Virtual Card Number technology specialist focused on corporate travel, has integrated with the MasterCard In Control for Business Travel solution. What in particular about the demand for virtual card numbers prompted this?
RC: So Conferma, as you pointed out, is a specialist in bringing virtual cards into the travel business and travel booking ecosystem used to manage business travel. The partnership with Conferma is not new to MasterCard – it’s an expansion of a partnership that’s about 18 months old.
What we’ve changed is that we’ve moved them from our general-purpose procurement virtual card system, called In Control for Commercial Payments. That’s built specifically for the payable space. We’ve moved Conferma to a new platform specifically built to help companies manage business travel – the way that it works and data that it captures is specific to business travel. It’s what we call In Control for Business Travel.
So this is a partnership where we have upgraded, or migrated, Conferma from that older platform to this new platform.
KW: So I think everyone’s familiar with the benefits of In Control in lots of other use cases – alerts, transaction information, fraud, and so forth. What does this do for a business traveler and someone who’s managing that program on behalf of a company?
RC: I think the number one reason companies will find this valuable is when it replaces what’s traditionally become the “ghost card” – that central account that businesses use for many travelers to book trip. Although those are very popular and have been used for many years, they have inherent flaws, the biggest of which is not being able to capture data on individual transactions and feed them into a reporting platform for a company.
By moving from that ghost card to an individual virtual account number issued for each transaction – airfare, hotel reservation, etc. – you’re able to attach to that the essential data that a company needs to manage business travel. Whether that’s accounting, supplier sourcing, or other strategic reasons, being able to ensure that that data is there was a big part of why we built In Control for Business Travel. I think that’s the biggest reason why companies will move to this solution today.
KW: So what is the relationship between what you described in terms of the ability to manage the travel booking and data more efficiently, and the increase in consideration of mobile solutions for business travels? Obviously, business travelers are consumers and used their phones in lots of other use cases. Is there an ability, with your platform and VCNs, make that bridge a more efficient one?
RC: So we’re talking about two different use cases. For these virtual cards, we’re talking about purchases that happen through a travel agency. For the advancements that we’re making in mobile, which may involve virtual cards or tokenization or other mobile wallet technologies, we’re talking about a business traveler on the road.
I think what answers your question best is the next step in the process – getting back from a business trip and having to process an expense claim. By having MasterCard participate both with the technology of the agency and the technology that the traveler uses, we consolidate that expense report with all of the information prepopulated for a seamless, hassle-free process. Then, the next step will be having the data that the company needs in a structured format that’s the same – whether it was the traveler or travel agent that did the booking.
What MasterCard does is, in many ways, is connect all of the parts of the business travel process from planning, to transactions and experiences on the trip, to the management of the expenses when a traveler returns. MasterCard links all of this together by having the right solution for the different parts of the value chain, and helps companies become more efficient in managing corporate travel.
KW: Are there other benefits to virtual cards aside from better access to data and some of the reconciliation and backend administrative aspects of managing travel?
RC: By using single account numbers for each transaction, controls can be set for the frequency of use or amount on the card. We can greatly limit the opportunities for fraud to occur on those accounts versus a traditional corporate card. There’s also the security of being able to limit the use to a particular merchant category, and know that the account number you’re passing through that travel reservation is specific to that transaction and won't be used for additional charges or upgrades. I think the fraud mitigation or minimization are other value points that corporations will evaluate when looking at why virtual cards are the next step to take in the evolution of business travel management.
KW: How hard is it for a company to move, whether it’s a corporate travel department or an agency, from what they’re doing today to using virtual cards?
RC: That’s where Conferma comes in. What we’ve done by enabling Conferma to use In Control for Business Travel is they cannot take that. They already have integrated with hundreds of travel agencies and booking tools that travelers make their own reservations. Companies like Conferma are going to be that last mile to take this virtual card technology and bring it into that travel agency’s ecosystem in a seamless way.
For strategy in taking the step toward virtual cards, what’s important is that companies make sure they look to banks that are focused on business travel. There’s a lot of virtual card solutions that have different applications. We believe it’s important to have one specifically built for travel.
The second thing is to work with their travel management company (TMC) from day one. That’s where these transactions occur – find out from them what they’re going to implement, whether it’s Conferma or other solutions to enable virtual card payments, and make sure they’re part of the process as their partner.
KW: Is there a downside to the virtual card strategy. It sounds like such a logical and positive thing to do, but there’s always a flipside.
RC: The flipside only is that it’s new. There’s a process – you have to implement from where you are today. If you’re doing it with an agency for the first time, then the process will take a bit longer.
What’s encouraging, and leads me to believe we’re at a tipping point in the evolution of using virtual cards for travel, is the number of TMCs that are connected to and able to process virtual cards is growing. We’re not far from a point where companies can switch to virtual cards and be confident that those tractions and integrations are already in place.
Group Head, Global T&E Products & Solutions, MasterCard
Richard Crum is responsible for the global development and management of the corporate travel payment products and solutions offered by MasterCard and our issuers. He also leads a team of product managers to develop the global strategy and align product development priorities to meet regional needs.
Prior to joining MasterCard, Mr. Crum held senior leadership positions with AirPlus International and UATP. During his career at AirPlus, Mr. Crum was responsible for establishing and growing their commercial card issuing business in North America. He held multiple positions with UATP, including serving as the president for the global airline payment network for four years.
Mr. Crum also served as the president for the Association of Corporate Travel Executives and as a member of the ACTE Board of Directors. He was twice recognized as one of the 25 Most Influential Executives in the industry by Business Travel News and named by Travel Agent Magazine as one of the industries Rising Stars.
Mr. Crum has a degree in Economics from George Mason University.
To listen to the full podcast, click here.