B2B Payments

How Airbnb Can Promote Corporate Virtual Payments

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Of all the barriers that exist to getting a disruptive technology off the ground, convincing users to change their behavior may be the most difficult.

In corporate travel, there are two major forces that face this hurdle: virtual payments and sharing economy services.

Both are slowly infiltrating the business traveler’s life, whether by businesses adding on-demand services, like Airbnb, to their list of approved travel vendors or by travel managers and accounting professionals making the switch to pay those vendors with a virtual card.

Virtual payments and sharing economy services may seem like two separate worlds, but Mario Zorn, the head of AirPlus‘ mobile and virtual payment team, said they’re closely linked and enduring similar growing pains within the enterprise. On the heels of AirPlus’ partnership with Airbnb to develop a corporate expense management solution, Zorn dove into how an openness to the sharing economy can lead to an openness to virtual payment solutions (and vice versa).

 

Airbnb Demand Increases

Speaking with clients, Zorn said he has experienced interest in Airbnb services for corporate travelers, but professionals aren’t exactly sure how to go about using it.

“Travel managers see travelers asking them how they are allowed to use sharing economy services, and they say they don’t have an answer to that,” the executive explained. “They can’t manage it like they can manage hotels or taxis or flights.”

It’s true that Airbnb has seen increased interest from corporates. Earlier this year, Travel Leaders Group found that more than 10 percent of travel managers in a survey said more than 10 percent of their own corporate clients use alternative travel suppliers, like Airbnb. Rising hotel costs are encouraging companies to explore Airbnb, too, according to T&E firm Concur, which revealed new data this month that found a 42 percent spike in the value of payments that companies made to Airbnb between 2015 and 2016.

But traction is slow. Airbnb has told AirPlus that it, too, has seen uncertainty among corporates.

“Companies told them that it’s nice to have Airbnb for corporate travel, but they need to have a professional method of payment for that,” he said.

 

Supporting Virtual Payments

The demand for a secure, professional way to pay Airbnb led the company to partner with AirPlus and develop an expense management solution. AirPlus supports its clients’ use of virtual cards to pay vendors, and working with Airbnb means its customers can now do the same when they book with Airbnb.

But like on-demand technologies, virtual payments are another area where companies need a bit of convincing.

Zorn, who attended the Global Business Travel Association conference earlier this month, said there were two key points discussed around the adoption of virtual cards for corporate travel spend.

“There are two questions that are always asked: Is it always accepted? And does it work all the time?” he noted.

And like Airbnb, businesses are growing more curious about virtual payments, too.

There’s an interesting way the two areas can support each other, though. Airbnb, along with other sharing economy services, like Uber, only take credit cards. That means companies couldn’t pay with a paper check or other, slower payment methods, even if they wanted to. Interest in Airbnb, by default, may force a company to consider a virtual card payment, too.

“I think it’s a trend,” Zorn stated. “Companies have two choices. They can take the more traditional and conservative route and not allow these sharing economy and new forms of services at all, or they can say, OK, we follow the trends, and we accept it, and we make use of these services — but we need to manage them properly in the same way we manage ‘traditional’ forms of business travel.”

Managing them properly means being able to access the data associated with a transaction, for businesses can gain greater visibility into employee spend. Often, a business traveler may use his or her personal credit card to pay for a service like Airbnb. That, Zorn explained, means the company has no access to the transaction data at all — yet another reason why commercial virtual cards should be considered.

Travel managers need to be able to access that transaction data from the very beginning (not at the end of a trip, when an employee files an expense report), he continued. Virtual card billings are invoiced to the company directly, with systems able to capture far more information about a payment — like staff ID, project number and check-in and checkout dates — than traditional payment technologies.

 

A Steady Climb

Airbnb has been in business now for more than a decade, but Zorn said it’s still an effort to convince companies to use virtual cards.

“It’s a strong trend and now gaining full traction,” he said. “The curiosity and the interest are there. Confidence, I would say, for those who have used it and tried it out on a small scale, yes, it is there. But there’s also the unfamiliarity with virtual cards.”

Despite understanding the convenience, security,and data aggregation capabilities of a virtual payment, businesses still struggle to truly embrace the technology.

“It’s not so much the technology,” Zorn said. “Rather, it’s a little bit of a mind change, isn’t it? Travel managers see that there is a new way of paying, which provides flexibility and a high degree of security. But it may require them to do things a little differently.”

That sounds quite similar to the struggle companies face when deciding to embrace on-demand and sharing economy services, like Airbnb. Zorn added that it’s a mindset for businesses to either move forward with innovation or to move against it, but either way, progress happens.

He said he was recently speaking with one German company that tends to stick to more traditional services. But, the firm told Zorn, a decision needs to be made about disruptive services.

“They said, ‘It’s happening anyhow, whether we like it or not,'” Zorn recalled. “This is the future. We need to take care of sharing economy services. We need to take care of virtual cards, mobile payments, and look into it, if we like it today or not. Our employees, our business travelers — they want to have this.”

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