Goodbey cach - changing how clients pay
AN INFLUX of new
technology has resulted
in a variety of pioneering
payment solutions in the
corporate travel space.
Most fall within two broad
categories: virtual cards and
mobile payments, both of
which have been praised for
their seamlessness, security
and data features as well as
their potential to eliminate the
burden of manual payment
reconciliation.
Coupled with increasing
demand from clients, it has
become essential that TMCs
familiarise themselves with the
new options on offer.
A study by GBTA and Sabre,
entitled ‘Travel Manager
2020’, showed that 66% of
corporate travel managers
expected alternative forms
of payment technology to
become a higher priority in the
next three to five years. The
priority of implementing virtual
payment technology increased
to 77% for travel managers
who report to Finance.
Virtual cards: pros
One of the most noteworthy
new technologies available,
and perhaps the one creating
the most buzz due to its ability
to mitigate fraud, is the virtual
card. Sometimes referred to
as ‘invisible payments’, virtual
cards give companies a high
level of control, and can be
limited to a specific merchant,
for a set amount at certain
time and date.
Tshipi Alexander, head:
corporate issuing, merchant
sales and service for Nedbank,
explains that this is a far safer
way to transact, as full card
details are never exposed
while at the same time
allowing for instant payments.
“Virtual cards don’t come
with many of the risks that
apply to different payment
types. If you’re paying via
EFT, for example, your money
is gone. If it’s a plastic card
where you send your data,
your information may be
compromised. If it’s a virtual
card, your data is safe.”
Tshipi says another benefit
of virtual cards is that the user
is protected by international
dispute rules. “When the
merchant signed up he would
have agreed to a set of terms
and conditions, and if the
service was not provided or
rendered as per the terms and
conditions that were signed,
you have the opportunity to
get your money back via the
association,” he explains.
With various solutions
already available in the South
African market, including
American Express’s vPayment,
the Diners Club Virtual Card
and the eNett platform, agents
are already embracing the
technology. Discussing virtual
cards at a recent GBTA forum,
Johanna Mukoki, group ceo
of Travel with Flair, said that
as a TMC, she had been very
happy to introduce virtual
card technology to her clients.
She says her team handles
virtual card transactions in
exactly the same way that
it handles vouchers, with
the added benefit of forcing
travellers to adhere to travel
policy by limiting it to particular
suppliers and amounts.
Club Travel’s executive
account manager,
Collin Austen, agrees
that virtual cards are
definitely a step in
the right direction, as
they allow for instant
payments. “Also, you
are able to go on
to the portal at any
given time and track your
transactions,” he adds.
Virtual cards: cons
However, there are a number
of barriers that are limiting
the uptake of virtual cards in
the South African corporate
market, particularly when it
comes to accommodation.
Collin points out that
internationally, travellers
may be used to carrying
cards in their pocket and are
comfortable with using them
to pay for extras on check out,
but that this is not the case
locally. “Many South African
business travellers do not
have company credit cards,
nor do they have the means to
settle for any extras at check
out. This is why the billback
is still in play in this country,”
he says.
Another hurdle is that
widespread industry
engagement still needs to
take place. Says Tshipi: “There
is no point in issuing a card if
the suppliers don’t know how
to use it. It’s very important
to educate the players in the
market and give them the
capabilities that are required
to use the new technology.”
Mobile payments: pros
Apple Pay, Google’s Android
Pay and Samsung Pay are just
some of the mobile payment
systems that have been
launched overseas, with many
more in the pipeline across
the globe.
According to a study released
by Ernst & Young, ‘Mobile
money – the next wave of
growth in telecoms’, emerging
markets were the first to
leverage mobile money, as
evidenced by initiatives like
M-Pesa in East Africa, but
the pace of innovation is
now quickening in developed
markets.
Once again, one of the
main benefits of using mobile
devices for travel transactions
is the level of security, as
many mobile devices make
use of biometric data, such
as fingerprints, in order to
authorise purchases. Also, as
no credit card information is
provided, data is protected.
Convenience is also one of
the major drawcards of mobile
wallets, with the ability to
make purchases with just one
swipe.
Mobile payments: cons
Despite the huge amount of
investment being ploughed
into mobile payment
technology, these solutions
have not gained much traction
in the international corporate
travel arena.
Tshipi says: “East Africa has
certainly been highly innovative
from a banking perspective,
when you look at initiatives
like M-Pesa, but South African
business travellers are unlikely
to start using local forms of
purchase when visiting these
destinations.”
Collin agrees and says that
mobile wallets are seeing
more growth in the leisure
space and have not gained
much traction from a local
TMC perspective. “Corporates
aren’t going to pay with mobile
money – they would rather
use solutions like BTAs, lodge
cards or accounts with
their TMC.”
Glenville Morris, head of
consulting at Mobile Travel
Technologies (MTT) points
out in a blog post that, since
2010, it’s been predicted that
‘this year’ will be the year in
which mobile payments will
truly take off, but the reality of
mobile payments never really
materialised.
However, he believes that is
set to change in the very near
future.
“For the first time, demand
and infrastructure are maturing
and coming together to make
mobile payments easy, secure
and intuitive in a way that they
never have been before.
He points out that all the
“major friction points” of
the past have finally been
resolved, including a more
seamless booking process
through the addition of saved/
recent/favourite searches,
as well as the ability to save
passenger and address
details.
Check-in is also easier
through widespread adoption
of passport scanning.
Cash is still king for travelling in Africa
FOREX and purchasing
cards continue to be
the payment methods
of choice for corporates
travelling in Africa, with
new technologies only
expected to provide viable
alternatives much further
down the line.
This is according
to Nedbank’s Tshipi
Alexander, who explains
that new card payment
systems work on the
premise that cards are
already widely accepted
and that the merchant
platform has been
established and is firmly in
place.
“You will need to see the
issuance of local credit
cards in large numbers
before the pendulum
swings the other way and
Africa starts to accept
cards over cash. If cards
aren’t frequently used by
the local population, then
it is difficult to bring in new
concepts such as virtual
cards. A lot of markets are
still in the infancy stage,
particularly when it comes
to the issuing of corporate
cards”
Tshipi says that as
infrastructure in Africa
starts to mature, it is likely
that payment associations
will try set up systems and
a sense of order within
the market. “Associations
can help drive acceptance
of cards and try to get all
the banks to work together
to specific standards,” he
says.
“If you look at the growth
rates that are expected
within the African continent,
it’s really just a matter of
time.” He also adds that
there may be opportunity
to leapfrog other forms
of technology, and usher
in a new era of payment
solutions rather than
going through all the steps
that traditionally come
beforehand.
He says that, aside from
South Africa, West African
countries are probably the
closest to adoption of new
payment solutions.
For now, however, the
most popular option
remains forex, but Tshipi
warns that it may not be
the best option.
“You can easily lose track
of what money was spent
on because you don’t have
point-of-sale information.”
Another option is loading
money on to, or extending
the limit on a purchasing
card which travellers can
either use at ATMs, or if
available, swipe at point
Did you know?
American Express’s BTA Powerlink has updated its offering. New
features include access to information on VAT and airport taxes for
the travel transactions, providing clients with the opportunity to be
more tax efficient when it comes to their claims.
New leisure peyment options: friend or foe?
