B2B Payments

Cost A Barrier To V-Card Adoption: LateRooms

Commercial card adoption can face an array of barriers, and one of the largest is a lack of supplier acceptance due to interchange fee costs. But, Graeme Descoteaux, head of corporate travel at LateRooms.com Business, says the cost of commercial cards — and virtual cards in particular — can also be a barrier to business payers’ adoption.

In fact, virtual cards’ adoption in business travel has steadily climbed, thanks to the payment technology’s security and travel managers’ ability to set controls on employee spend. Virtual cards can be generated for a specific amount at a specific vendor, further strengthening companies’ position against fraud.

Descoteaux recently told PYMNTS that businesses using a travel management company (TMC) may charge for virtual card capabilities, though. Many small- and medium-sized businesses (SMBs) aren’t using a TMC at all, passing multiple commercial cards between employees rather than adopt a virtual card.

“While virtual cards have played a prominent part in business travel for some years now, we’re also aware that travel management companies that offer these services also charge additional fees to the client,” he said. “Currently, our customers are using multiple credit cards in their business to pay for numerous things — as well as book their employee accommodation.”

This strategy prevents small businesses from having a consolidated, unified view of employee travel expenses.

Research suggests virtual card use is on the rise, with analysts at the Global Business Travel Association (GBTA) finding that approximately 25 percent of virtual card non-users plan to adopt the tool at some point in the future. LateRooms.com Business recently struck a partnership with Diners Club to link SMB its hotel travel booking solution customers with virtual card capabilities. In a statement announcing the partnership, Descoteaux said the collaboration, and the launch of the company’s Statement Account facility, “guarantees business travelers a cost-effective and efficient method of payment.”


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.