In an environment when many aspects of the business world have moved online, there are still a few areas where the physical still reigns supreme. One of these is corporate-issued piece of plastic that can be found in so many business travellers’ wallets. Be they corporate cards – similar to the credit cards issued to consumers – or the more restricted P-cards or one-cards, there has been relatively little change since they were first issued more than 60 years ago.
Although physical cards have served businesses and their employees well for so long, the combination of a lack of security and evolving business and travellers’ needs has meant that the humble piece of plastic is rapidly becoming obsolete. Physical cards aren’t practical to deploy for infrequent or one-time travellers such as interviewees, don’t translate well to new-economy merchants such as food delivery or ride-sharing services, and also have considerable drawbacks when it comes to security. Cards can easily be stolen or cloned (at gas stations and restaurants, for example), and when this does happen, they can be slow to be replaced, especially if the cardholder is overseas.
The obvious solution to many of the challenges posed by physical cards is to simply eliminate the card itself, and instead use virtual accounts, which use the same 16-digit numbers and security codes. These virtual cards can be used both for both online purchases like travel booking, as well as for in-person purchases, either via a card-connected app including Uber or Lyft, or through the cardholder’s phone, using services such as Apple Pay or Google Wallet.
So why should an organisation consider adopting a virtual card strategy? The two main reasons are ease of management and reconciliation, and enhanced security.
As there is no card to order or ship to the recipient, virtual cards can be issued, activated and retired as needed, in real-time, simply by the administrator contacting the issuer. They can be set up to have as few or as many restrictions as needed for the cardholder’s specific requirements. For example, an interviewee could be issued a single-use card which is restricted to booking a flight and hotel up to a £500 limit with a specific online travel provider. At the other end of the spectrum, a frequent traveller may be issued with a card which has almost no spending restrictions, to offer them maximum flexibility.
Corporate finance teams also benefit from more streamlined reconciliation of travel agency and individual cardholders’ purchases. Single-use virtual account numbers provided to corporate travel agencies allow each transaction to be more easily allocated to specific users than when using a single ghost card for all transactions, and individuals’ statements can be directly imported into an expense management solution, eliminating the traditional need to match purchases using the “tick and tie” method.
Virtual accounts’ ability to offer significantly enhanced security measures is another key reason for them to be adopted. Most obviously, as there is no physical card, it’s impossible to be lost, stolen or be cloned. Even if a traveller’s mobile phone containing card details or mislaid or stolen, account data is encrypted and inaccessible without using the phone’s passcode or fingerprint scanner. As a result, inappropriate use by an unauthorised third party is close to impossible. The potential for intentional fraud by cardholders is also dramatically reduced, thanks to the ability for card administrators to restrict spending parameters.
As a result of these, and many other benefits, it’s clear that the emergence of the internet has revolutionised how organisations book employees’ travel, and the fast pace of innovation in payments and mobile technology has caused a paradigm shift in the way that individual business travellers pay for their own travel booking and on-the-road out-of-pocket expenses. From booking to buying to expensing to reporting, business travel is about to become a seamless virtual experience that is both more secure and more efficient.
Ready to learn more? Download the recorded webinar, The Late, Great, Traditional Corporate Card, featuring a discussion between Chrome River and U.S. Bank on this very topic. Or download the new ebook, Corporate Credit Cards in Your Business Travellers’ Wallets. Both resources discuss the quickly-shifting landscape and how your organisation can adapt to fit the needs of both your finance team and business travellers.
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