B2B Payments

Corporate Travel Spend Isn’t Digitizing As Fast As Some Would Like

B2B payments may be slow to embrace disruption and innovation, but there is one category of corporate spend that may be ahead of the curve: business travel.

Mobile by nature, business travel has emerged as a leader in commercial payments digitization as companies explore ways to make it easier for employees to spend while on a trip  yet ensure the data from that spend is captured, reconciled and analyzed. These needs position the segment to experiment with cards, virtual and mobile payments. A new report from Global Business Travel Association (GBTA) and AirPlus International suggests the industry is indeed taking advantage of virtual payment innovation though, the report warned, businesses have a long path to widespread adoption.

Their latest report, “Five Business Travel Payment Trends,” concludes that mobile and virtual payments continue to gain traction in the corporate travel market.

GBTA Research Director Jessica Collison said in a statement, “Mobile technology has become increasingly ubiquitous and business travelers are looking to use the same technology they use in their personal lives when they travel for business. Virtual payments are becoming more popular while offering increased levels of payment security.”

Researchers found that most corporate travel buyers (56 percent) in the U.S. use a central travel account (CTA). Also known as a “ghost card,” this payment tool enables travel suppliers to bill a company’s master credit card account used by multiple employees. However, 11 percent of businesses’ travel programs are using single use virtual cards to book travel, researchers found, and nearly a quarter of survey respondents said they are likely to adopt virtual cards some time in the future.

More than a fifth of businesses’ primary commercial cards can be integrated into a mobile wallet, and 61 percent of non-mobile wallet users said they are at least interested in enabling support for mobile wallets for traveling employees.

Challenges To Adoption

Though researchers at GBTA and AirPlus found increasing adoption of virtual and mobile payment technologies in the corporate travel sector, the figures presented in their report prove the vast majority of professionals and their employers aren’t using single-use virtual cards or mobile wallet solutions. Analysts found several factors limiting adoption of these technologies. For instance, nearly half of survey respondents (45 percent) said their cards are not compatible with mobile wallets and an additional third noted that they’re not sure.

The report also pointed to “concerns about administration, supplier acceptance and visibility/control” as key hurdles to adoption of single-use virtual cards. Nearly two-thirds said they are concerned about the administrative burden of virtual cards, while more than half said supplier acceptance is a worry and 39 percent cited visibility and control issues associated with virtual card payments. Forty-five percent of survey respondents said they are not sure if they will ever adopt virtual cards.

Spend visibility and management is a critical component of deciding which payment technologies that businesses and their travel managers adopt. Presently, these professionals are largely satisfied with the current level of visibility they have: About two-thirds of survey respondents said their travel programs offer very good ability to identify rogue, out-of-policy spend, while about half said their programs are very good at preventing this type of rogue spend before it happens.

However, despite the advertised benefits of virtual and mobile payments related to the ability to provide transaction data for automated reconciliation, only about half of survey respondents said they reconcile expenses with booking data. Instead, 79 percent said they search through expense reimbursement reports to identify out-of-policy spend.

Virtual and mobile payments aren’t the only technologies struggling to gain traction in the business travel space. Researchers noted that gamification tools, that enable employers to reward employees for saving money on business trips, are also struggling with adoption  only 6 percent of professionals surveyed said they have the ability to offer such rewards to traveling employees. While a quarter said they would consider adopting such a tool (so long as there was minimal administration involved), 42 percent said they would not consider it at all.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.