Travel is steadily trending upward from the last few years when worldwide movement was dramatically cut due to the pandemic. At the height of the pandemic in 2020, U.S. spending on corporate travel dropped 71%, equal to a $94 billion loss. However, things are looking up for business travel. According to a recent Morgan Stanley survey, 34% of large and small companies anticipate a full recovery of pre-Covid-19 corporate travel by the end of 2023.
In our latest episode of the CSI Insider Podcast, we are joined by Juliann Pless, SVP of Travel Solutions at CSI. Juliann was named one of the top 50 most influential women in travel by WINiT by GBTA – the Global Business Travel Association. Juliann discusses the impacts of the pandemic on corporate travel and the evolution of contactless payments within the industry.
Corporate Travel During the Pandemic
Business travel practically stopped during the pandemic for most industries. However, certain essential businesses and people continued to travel out of necessity. For example, healthcare workers, manufacturers, financial services, and communications and IT professionals supporting the pandemic’s efforts “were the only individuals out on the road those days,” Juliann notes. But businesses and individuals were traveling differently than typical business travel.
During this time, travel was primarily domestic, and trip durations became much shorter. Tradeshow season was effectively shut down for most of 2020 and only resumed partially in 2021. Many companies opted for video conferencing and still offer that option today.
Juliann recalls, “Towards the end of the pandemic, we started to see contactless everything come into play.” Hotels and airlines realized the importance of keeping people safe when they had to travel. And touchless functions were incorporated into everything from hotel room doors to motion sensor faucets in bathrooms. The need for safety was also a boost to digital and contactless payments. “What evolved out of the pandemic was the ability for organizations to enable more digital payment capabilities within their travel programs.”
The Evolution of Contactless Payments
Contactless, or digital, payments existed before Covid-19. But the pandemic contributed significantly to their widespread use. Another factor that encourages contactless payments is consumer behavior. Since the pandemic, digital wallets have become more common. Products such as Google Pay, Apple Pay, and Samsung Pay may have been boosted by the pandemic but will continue to be standard forms of payment.
In 2019, 51% of passengers used a smart device for online check-ins.
These types of transactions are controlled by a smartphone and require little to no physical contact. As travel increases, corporate travelers’ expectations will mirror their consumer expectations. And payments while traveling for business will need to be just as convenient.
The rise in contactless payments encouraged businesses to educate themselves about virtual and digital payments for the safety of their business travelers. But there are also many advantages to using virtual pay in place of the usual forms of payments for travel.
Due to the pandemic, 55.7% of corporate travel managers have made contactless payments
a high priority for their travel program.
(Business Travel News, 2020)
Contactless Payments and Business Travel Come Together
Pre-pandemic virtual payments were a slow transition for hotels. When virtual card payments were introduced, hotels’ computer systems were not equipped to process them.
The way businesses paid for travel accommodations was by fax. They sent ghost card or lodge card numbers on an authorization form by fax to multiple hotels. Unfortunately, the card numbers were exposed and easily accessible for fraudulent activities because there were no controls applied to the card numbers.
Virtual cards work like physical credit cards, but each virtual card number is generated for a specific purchase or purchase limit. So even if the number is somehow stolen, it could not be used for anything other than the payment it was generated to cover. This prevents chargeback issues and provides a secure form of payment for companies with frequent business travelers.
Now hotels can process virtual cards, which is more secure for business travelers, their companies, and the hotels. Virtual cards have several parameters of controls that prevent fraud.
The Future of Virtual Payments in Corporate Travel
There will always be a need for physical corporate cards, which won’t go away. However, in the future, we’ll see virtual payments continue to evolve. This is because there are so many possibilities for non-traditional use cases of virtual payments, especially for business travel. For example, airline vouchers for canceled flights, meals, and miscellaneous travel expenses could be done by virtual payments.
It can go beyond creating efficiencies in accounts receivable and accounts payable departments and become useful in several areas, including providing a more holistic view of payments across organizations.
A contactless, secure form of payment was once a nice-to-have, but now it’s the new normal for hotels, airlines, and other travel incidentals. And virtual and digital payments are here to stay.
To hear more from Juliann Pless about the effects of Covid-19 on the travel industry and the rise of contactless payments, listen to the CSI Insider Podcast episode here.
Corporate Spending Innovations (CSI) is a global FinTech leader providing innovative payment solutions to world-leading brands across all industries. CSI automates and digitizes B2B payments with a safe and highly secure cloud-based payments platform. For a more efficient way to manage payables, including virtual credit card, B2B Payments Network, ACH, and check, book a demo here.
CSI is an Edenred Company, the global leader in payment solutions for the working world.