NEU-ISENBURG, Germany, June 11, 2019 /PRNewswire/ — Almost one third (31 percent) of companies use virtual cards to pay for hotel accommodations costs incurred by their employees. Within only four years, the number of virtual card users has quadrupled (2015: 8 percent). These figures have been arrived at after analyzing the responses to the most recent travel survey conducted by AirPlus International, a leading international provider of solutions for daily business travel management. To pay using a virtual card, users must first generate a credit card number digitally. Virtual cards are settled and controlled centrally. While in Australia, this payment method is used by 46 percent of companies making that country the most frequent user of virtual cards, it is used least frequently, but still by one out of ten companies, in Switzerland. For the survey, AirPlus International interviewed a total of 1,285 business travelers in 18 countries and 676 corporate travel managers in 13 countries.
According to survey respondents, corporate cards remain companies’ method of choice when paying for hotel stays. In addition, 74 percent of the travel managers interviewed confirmed that they continue to rely on plastic cards (respondents were allowed to name more than one option). In this segment, Scandinavia, at 88 percent, is the frontrunner among the regions. However, corporate cards are not suitable for every traveling staff member. Companies tend to have credit cards issued only for their regular business travelers but survey responses indicate that only one of every ten business travelers takes more than ten trips per year. More than half of all business travelers (51 percent) take between one and three trips per year and 25 percent take four to six business trips a year. Stefan Walde, Director Product Management at AirPlus notes: “In today’s work environment, employees with fixed contracts only make up one of many groups in the overall workforce. Temps, service providers, customers, and suppliers increasingly travel for companies and thus are business travelers.” Corporate cards are not always a company’s first choice to offer members of these groups.
Many reservations are not made in business portals
Virtual payment can be an attractive solution for these groups. As with corporate cards, they deliver valid data for companies — an important factor but not least because as the responses to the study indicate, as many as 41 percent of travelers place their reservations for accommodations directly with hotels or use online travel agencies rather than business portals to do so. “This entails risks, for example, regarding compliance with corporate travel policies. In many cases, whether or not reservations are made in line with a company’s supplier policy is unclear. In addition, analyzing travel expenses takes a lot of time,” Walde says.
Costly and time-consuming settlement processes still are common
When using corporate cards, virtual cards and other means of corporate payment companies obtain all the essential data directly and avoid time-intensive processes. Almost two-thirds of all business travelers (63 percent) stated that these payment methods cost them the least amount of time and money. However, other options are used widely as well: 72 percent of companies ask their travelers to pay for their travel costs and then reimburse them through travel expense reports. While this course of action differs between regions, it is used by the majority of respondents in all the markets surveyed. At 50 percent, the United States brings up the rear and at 88 percent, Switzerlandmakes the most frequent use of this option. Even advancing cash still is an option for close to half (49 percent) of the companies responding to the survey. “Cash advances cost extremely high efforts because the companies must have cash on hand at all times and thus tie up their cash flow. Moreover, providing staff members with money and settling expenses with them after their trips require complex administrative efforts,” Walde adds.
Minimizing risks and administrative steps
Modern payment options such as virtual cards help companies manage business travel without adding to the workload. Since 2005, AirPlus A.I.D.A. Virtual Cards have been offering just that. For every individual virtual card, companies can determine the credit limit and the type of hotel and other reservation regulations as well as the card’s period of validity. Because each virtual credit card number can be used for only one transaction, the risks of card abuse and fraud are low.