How to Use Virtual Cards for Business Travel Payments

Sam Gilbertson

Written by Sam Gilbertson

5 min read – 

25 July, 2022

How to Use Virtual Cards for Business Travel Payments

International currencies. Exchange rates. Trading fees. Daily fluctuations.

When it comes to business travel payments, you can be left with quite a tangled web to unravel.

At the consumer end of the scale, fintech solutions like Monzo and Revolut have massively simplified travel money. But there’s always been a gap for business travel payments which have, until recently, relied on corporate credit cards and reimbursed personal payments.

The new future for business travel payments?

Virtual cards (vCards) have been around for a while, but they haven’t always been user friendly or easy to integrate. That’s changing as tech matures and fintech and travel technology have converged to solve common problems.

Based on our own HotelHub data and projections, we forecast an incoming surge in virtual card use to pay for hotel accommodation. This is in part being driven by the EU’s enforcement of Strong Customer Authentication (SCA) – but there are many other benefits to using virtual cards, beyond streamlined payment authentication.

What exactly is a virtual card?

A virtual card only exists in the digital world. There is no plastic card to speak of and all transactions are carried out digitally (either online or within a mobile app).

Virtual cards use a one-time, temporary card number. It’s randomly generated by the bank and then linked to the main account with a security code. Once the virtual card has expired, no more transactions can be made with it.

This makes it especially useful for corporate travel – because any expenses incurred are limited to the travel period. This offers excellent fraud, loss and theft protection.

But that’s not all.

For TMCs and booking agents, vCards offer enhanced behind the scenes processing, making expenses easier to manage and track, as well as a better travel experience for teams on the road.

What other problems do virtual cards solve?

With traditional payment methods, handling expense accounts after the fact can be time consuming and result in errors. Keeping, digitising and storing receipts then checking them off against the travel policy – it’s a long process. Issuing a company credit card doesn’t necessarily fix everything either, adding more risk to the situation.

Vcards allow expenses to be settled immediately, without the need for receipts or expense claim submissions. This is more convenient for everyone – not just the traveller and the vendor, but accounts and finance too, as it saves them so much time.

Virtual cards also provide excellent, flexible control over spending. Limits can be set not only on date ranges, but on transaction amounts, purchase types, seller types, transaction frequency – the list goes on. This ensures that every single transaction made on behalf of the company is 100% in-policy.

Specifically to hotel bookings, vCards circumvent Strong Customer Authentication, which makes hotel booking transactions in the EU faster and less complicated – but the benefits can go deeper.

Virtual cards in action

One of our clients is a major global payment card provider and a virtual card issuer. They helped one of the largest tech companies on the planet solve several challenges that arose from using traditional payment modes and reimbursement models.

The tech company in question was struggling with numerous booking challenges, inconsistent billing processes to hotels and having to manage overly complex expense balances.

By simply moving to a virtual card platform, this tech giant was able to push all hotel payments through a single solution – while tracking, monitoring and reconciling all traveller spend in a single source.

vCards eliminated the reimbursement process entirely.

This has given the tech company’s business travellers a better travel experience while reducing their out-of-pocket expenses from an average of $1,000 per trip to less than $150 per trip.

Best practice for using virtual cards

In many travel management tools, such as HotelHub, you can add and create virtual cards directly in the platform. 

By integrating or issuing Vcards directly within your travel management software, you can further consolidate your workflow into one platform. This means even less bouncing around between tools and greater efficiency.

But what does best practice look like?

1. Set time limits

The first and easiest metric to tackle is time because you’ll know the exact dates of travel – so set the ‘valid from’ and ‘expiry’ dates of the virtual card to match those of travel.

If for any reason return travel is cancelled, extended or delayed, a new Vcard can be issued.

2. Apply payment restrictions

When it comes to spending frequency and amount limits, this is entirely at the discretion of each travel policy and each employee’s eligibility. But transaction types and merchant types should be fairly obvious from the policy.

For instance, certain types of entertainment or gambling can be restricted, making payments for them on the Vcard impossible – and if anything were to slip through, real-time monitoring and alerts can quickly give the heads-up.

3. Communicate usage policies

Really, the best practice to use is a solid foundation of trust. Companies need to have a two-way, transparent conversation with their people on using company funds for business travel, with clear rules established before a single trip is taken.

Nobody wants to feel like they’re being watched and scrutinised for every little transaction – so corporates need to be crystal clear in travel policies and in communications.

A clearer way forward

Like we said at the start, unravelling business travel expenses can be difficult  – and establishing etiquettes around spending can be a minefield.

But thanks to virtual cards, the whole process is becoming much simpler, more transparent and easier to manage.


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