Single-Use Virtual Accounts Gaining Popularity Among Business Travelers
Today, the GBTA Foundation released a new study on virtual payment solutions sponsored by U.S. Bank. The following press release went out announcing the new report:
Majority of Suppliers Accepting Virtual Payments
About 20 percent of American businesses today pay for travel using cardless single-use “virtual” accounts, up from 13 percent last year, according to a new study by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA). Meanwhile, the survey found that a majority of travel suppliers are accepting single-use virtual accounts — 53 percent. This gain in popularity for a relatively new payment method likely stems from an increase in marketing and educational efforts by the industry.
The Buyer and Supplier Outlook on Virtual Payment Solutions study, sponsored by U.S. Bank, surveyed more than 220 U.S. travel buyers and travel suppliers to gain a better understanding of which types of business travel payment solutions they prefer. The results confirm the growing popularity of virtual payment solutions, with those buyers who have adopted single-use account solutions reporting satisfaction with the controls, compliance and data reconciliation benefits that the technology delivers.
Unlike more traditional central billing solutions such as Central Travel Accounts, single-use virtual accounts use a unique account number created and authorized for a specific transaction amount, date of use and merchant category. When a traveler makes a booking, the travel supplier receives a unique account number, and must charge the account within a designated time frame and for a designated amount. Following payment, an automated reconciliation process matches the travel booking with the transaction. The process reduces paperwork, potential errors and labor costs while producing a transparent view of travel spend for supplier and buyer alike.
Although usage is growing, the findings suggest opportunities for process enhancements that would drive greater adoption. Approximately one-third of travel buyers still report a lack of familiarity with single-use virtual account solutions. Suppliers who don’t currently accept single-use account payments express concern about confusion at the point of sale, indicating a need for the industry to find a better way to transmit account information from booking systems.
“Advances in payment solutions and the growing popularity of virtual payments represent a positive trend for travel buyers,” said Joseph Bates, GBTA Foundation vice president of research. “These new payment solutions provide travel buyers and suppliers with increased control and improved efficiency of payment processing, all while making the traveler experience more hassle-free.”
“The survey findings show promising growth in adoption of single-use accounts for travel payment,” said Mary Miklethun, head of Large Market Commercial Card Product & Marketing for U.S. Bank. “At the same time, they underscore the opportunity to keep customers updated about the financial and security benefits of virtual payment technology and tee up even stronger growth.”
Other key findings within the report include:
- Travel buyers tend to use more than one type of payment method, with 82 percent using two or more payments and about two-thirds using virtual payment methods alongside corporate card programs.
- Although a minority of travel buyers use single-use virtual accounts currently (20 percent), among those who do, they tend to be satisfied. Some travel managers are particularly satisfied with elements such as controls and compliance, data reconciliation and management capabilities and security and protection from fraud/misuse. By comparison, a larger percentage of Travel Suppliers accept single-use virtual accounts (53 percent) and are also satisfied with the process.
Future Opportunities for Single-Use Virtual Accounts
Among non-users, travel buyer familiarity with single-use virtual accounts is on the upswing. In the 2014 study, only 23 percent of travel buyers said they were “familiar” or “very familiar” with this type of account. Today, that number stands at 39 percent and with increased education and marketing there is an opportunity for that to continue to increase.
According to the survey, if buyers’ rates of implementation of single-use virtual payment accounts increases to match suppliers’ adoption rates, we could see marked growth – possibly in the near future – in this industry segment.
The current study is based on an online survey of 229 U.S. respondents, of which 65 percent are travel buyers and the majority of remaining respondents are travel suppliers (30 percent). All respondents have some level of responsibility in making decisions about payment solution providers and policies.
The study, Buyer and Supplier Outlook on Virtual Payment Solutions, is available exclusively to GBTA members by clicking here and non-members may purchase the report through the GBTA Foundation by emailing firstname.lastname@example.org.