The quiet revolution in business-to-business travel payments

Celia Pereiro

Head of Payments, Amadeus IT Group

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If you could invest in Google search terms, the word “FinTech” would have made a lot of money for investors in the past 18 months. Searches for the term, which is short for Financial Technology, have grown by ten times since June 2014.

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It’s not just FinTech searches that are growing. According to CB Insights, investment in FinTech start-ups more than doubled from $3.9 billion dollars in the first nine months of 2014 to over $10 billion dollars in the same period of 2015.Forbes magazine also commented, “Just as Amazon changed the way we shop and Apple reinvented the music biz, digital disruption is going to soon affect every aspect of your money: how you earn it, save it, invest it and spend it.”

In the travel industry, a similar FinTech revolution has been quietly taking place in the way travel agencies pay suppliers. Historically, this money flow has been managed – to the satisfaction of most – by IATA’s Billing and Settlement Plan (BSP). However, the growth of air content outside of the BSP – such as low cost carriers like easyJet and Ryanair – and the increasing reliance of travel agencies on non-air content for their revenues, has driven travel agencies to look for alternatives.

Starting around 2000, virtual cards were developed as a way for consumers to buy products safely on the internet. When you wanted to pay for something you would go to a portal where you could generate a credit card that would only be used for the one purchase you were about to make. Culture eventually overtook this mind-set and people became comfortable using their own credit cards on the internet.

Since then, virtual card providers pivoted and their use in the travel industry is increasing.

Virtual cards currently allow instant payment where the physical card is not required (online, over the phone, or fax), replacing payment methods such as invoicing, wire transfers, bank debit card, cheques and cash advances.

Virtual cards also:

  • Ease payment outside the business service provider:

    LCCs and hotels, car rentals, and other travel content


  • Facilitate the reconciliation of sales:

    Virtual cards have a unique identifier for each transaction so reconciling sales with costs is easy


  • Reduce fraud risk through increased security:

    Travel agencies can put strict controls on the use of virtual cards, thus reducing the risk if card details end up in the wrong hands


Nevertheless, the mainstream adoption of virtual cards still faces challenges, including efficiently integrating them into agency systems, lack of familiarity with the concept, and lack of choice.

However, these roadblocks to adoption are increasingly being eliminated. As travel agencies come to the realisation that virtual cards could help them increase security, improve back-office efficiency, and add value beyond air content – will 2016 be the year virtual cards become mainstream? Have a look at theAmadeus Newsroomand stay tuned to this blog for more about virtual cards in the travel industry.




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