Last month, corporate payments firm WEX announced a new tie-up with Grasp Technologies to harness the power of virtual cards for businesses. Soon after, PYMNTS spoke with Grasp’s Vice President and CMO Dave Lukas about the collaboration, which sees its unit GraspPAY automatically generating a WEX virtual card for businesses booking corporate travel in an online booking system.
Now, PYMNTS gets WEX’s input on the partnership, and where virtual cards fit in the corporate travel space – and in B2B payments overall.
Amid the company’s recent acquisitions of fleet card rival EFS and health care payments firm Benaissance, WEX’s Senior Vice President and General Manager of Virtual Payments Jim Pratt tells PYMNTS about how its work with GraspPAY is part of a broader mission to hand the power of emerging payments technologies to corporations, for corporate travel and beyond.
That’s a lofty vision for a corporation whose success is largely built on payments services for the fleet sector. But Pratt said the company is approaching corporate travel payments in the same way it does fleet.
“WEX’s mission is to simplify complex payment environments. We built our success in the fleet business creating solutions to meet our customers’ unique needs, and helping them increase payment efficiency, security and convenience, as well as save money on fuel costs,” Pratt said. “For over 15 years, WEX virtual cards have helped transform the travel industry in a similar way.”
He added that the company is looking to help travel companies automate their payment processes much like it provides automated tools to the fleet sector, including streamlined data aggregation and spend controls.
WEX can’t operate in the corporate travel payments space exactly as it does in fleet, however.
For example, while fleet drivers are handed physical cards to fulfill the needs of their managers in terms of spend control and analytics, Pratt said that a virtual card is an ideal product for travel companies working with business clients.
“The major trend we see is the desire to make payments faster, more efficiently, convenient, and secure for both the buyer and the seller,” the executive said. “This is not only true when buying a coffee, but also for a global payment to a hotel supplier in Asia.”
[bctt tweet=”The major trend is to make payments faster, more efficiently, convenient, and secure”]
Hotels need to be paid quickly, he added, while companies need to make sure their payment is safe.
“For this reason, in travel especially, we are seeing a rise in virtual card use where there is wide and growing acceptance.”
Like so many virtual card proponents, Pratt said the glory of the technology is within its security capabilities. The single-use nature of virtual cards, for example, means they can only be used for one transaction, even if they fall in the wrong hands. But the fraud-fighting capabilities of virtual cards can go further.
“They can also be locked down so that they can only be used with a specific merchant category and amount, eliminating the risk of fraud,” Pratt said.
Even apart from security, virtual cards are ideal for the corporate travel market in other ways, too, said Pratt. For example, while fleet is generally a regional operation, corporate travel is “truly global,” he said.
“Any travel company will at some point have a need to book travel in another part of the world,” Pratt explained. “Our virtual cards can be used to pay in most major currencies across the globe, which allows the travel supplier to receive local currency or currency of their choice.”
Virtual cards can also help mitigate the risk of foreign exchange fluctuations and help businesses avoid the sting of foreign transaction fees. Pratt added that WEX issues its virtual cards in nine different countries, meaning cross-border fees can often be nixed when a corporate user is booking travel in those jurisdictions.
The corporate travel space is an easy target for innovators to explore ways to ease international and cross-border payments friction – a challenge that many say the virtual card has the potential to solve. But according to Pratt, corporations are going global in ways other than business travel, and v-cards can solve their payment and security needs, too.
“With the backdrop of growing global concerns around payment security we are seeing a rise in the interest and use of virtual cards in a variety of other industries,” the executive said. “Plastic cards don’t have the attributes to enable them to compete with virtual cards in this manner; it is a huge differentiator.”
The WEX executive said that as corporations look to become more efficient, the cross-border capabilities, speed and data access of virtual cards and other e-payment tools will see continual adoption.
But corporate payments aren’t stopping at the virtual card, Pratt said. With mobile payments and other high-technology spending tools emerging on the scene, he stated that the energy and focus behind payments technology makes it “a particularly exciting time to be in the payments space.”
“These trends are no longer just applicable to consumer,” Pratt added. “They are crossing over to corporates.”