Virtual Card Programs: Why Your Travel Program Should Move Toward Digital
Saying ‘there’s an app for that’ used to be a way of implying that a process or a company was on the cutting edge. As smartphones have embedded themselves more and more into our everyday lives, though, having an app for everything is more an expectation than a surprise. We can use an app to do everything from order Starbucks to request a cab to turn the lights on and off at home. And while more and more people are hopping on the Android and Apply Pay bandwagons, it’s taking a little longer for corporate card programs to become the norm.
In a poll from the Global Business Travel Association Foundation, Skift found that business travelers still prefer plastic over digital when it comes to payment.
Virtual Card Programs Slow Adoption Rate
In essence, virtual credit cards are simply credit card numbers. Just not on a physical credit card. Most issuers work with an organization to use their platform or software that will generate a short-term credit card number linked to a permanent one. The user—in this case, business traveler—can use the *card* to make purchases.
While some variance can be found depending on the size of the company, the data indicates that corporate credit cards are still the most widely-used, with virtual accounts landing in last place for both large and small/midsized organizations. The breakdown looks like this:
- Corporate credit card (94% large organizations; 84% small/midsized organizations)
- Personal credit/debit card (65%; 43%)
- Central travel account (51%; 49%)
- Direct supplier invoice (35%; 18%)
- Company cash advances (28%; 14%)
- Virtual cards (9%; 8%)
That’s right: businesses are more likely to allow business travelers to use their personal accounts instead of managing expenses directly with something as easy as a virtual card.
There isn’t a single reason for the lack of adoption amongst corporate business programs. Particularly when one looks at what a company has to gain by implementing virtual payment structures.
How Virtual Card Program Increase Efficiency
One of the major headaches that can come with any business travel is tracking and reconciling travel spending (especially in organizations that allow employees traveling for business to use their personal accounts, or give cash advances). Virtual cards allow more transparency between the employee and the organization, ensuring proper tracking and allowances. For example, when it comes to hotel direct billing, a virtual card can be issued for the specific hotel itself.
And from the perspective of the business traveler, it’s one less thing to track in the midst of everything else. Their virtual card is safely accessible via their smartphone. Maybe best of all, virtual cards are nearly theft-proof. If someone did happen to lift the credit card number, the business can turn it off immediately using the issuing platform/software.
What Other Efficiencies Can Carrousel Uncover In Your Corporate Travel Program?
User adoption of virtual cards is growing, and we know that it’s still on the horizon for many businesses. Carrousel Travel can help your organization design business travel strategies, like implementing virtual cards, while addressing your unique culture, objectives and needs.