Amid a steady flow of announcements about virtual payment in corporate travel, American Express is putting on a different spin. It has created a model that combines the single-use concept of virtual account numbers with the centralized Business Travel Account setup. Amex’s “enhanced BTA” now is available in Australia and the United Kingdom, with additional markets under consideration, according to a company spokesperson.
The official declined to comment on whether the new offering would be available in the United States, but Amex’s U.S. website proclaims the introduction of “virtual accounts for the reality of travel.” [UPDATE: Subsequent to initial publication of this article, the linked page was revised and no longer mentions virtual accounts.]
Business Travel Accounts, or BTAs, also are known as Central Travel Accounts, lodge cards or ghost cards. They traditionally have a single account number. Employees of companies that have gone this route use that one number mostly to book airfares via their travel management companies. The employer gets one bill and makes one monthly payment to cover all the charges.
According to a Global Business Travel Association/U.S. Bank 2015 study, BTAs are “best utilized for airline transactions, such as allowing the company to purchase blocks of lower-cost tickets and to improve the management of tickets purchased in advance. They also help when reconciling the ticket data, including the passenger name, with the transaction.” The study noted that these payment accounts also protect against fraud and provide travel management reports.
A 2015 BCD Travel report laid out some of the downsides. Of course, BTAs can’t be used for taxis or other en-route purchases. They’re incompatible with low-cost carrier airfares, according to the report, “because they don’t come with the security code that these companies require.” Though BTAs are “less exposed” to fraud than individual corporate cards, their limits “tend to be very high,” BCD noted, and therefore one successful instance of fraud “could have devastating consequences.”
According to information posted to Amex’s Australia website, the company’s “enhanced” BTA would fix some of those problems.
It’s still a centrally billed account that provides spending visibility. The addition of virtual account numbers, though, further minimizes risk and improves policy compliance. That’s because unique 15-digit VANs are generated for each specific booking (air, car and hotel) via the client’s TMC and sent to merchants. As with other virtual payment programs, client managers can set spending limits, valid vendors and effective dates.
“VANs let you customize your BTA using defined data fields,” according to Amex. “The data from the TMC (booking) and the travel providers (billing) is sent to the BTA and is consolidated in a single eData File for reconciliation.”
In written comments, the spokesperson indicated that Amex BTAs heretofore covered “expenses for air and travel management company-invoiced transactions.” Clients expressed interest in expanding central-bill capabilities to more types of travel expenses.
“Enhanced BTA now offers central billing for hotel charges in the U.K. and Australia, as well as low-cost carrier air transactions in the U.K.,” the official wrote. “The centralized account also enables client companies to pay travel expenses for large groups, employees who do not have corporate cards and travelers who are not employees, such as job applicants and consultants.”
Payments company Conferma automatically generates VANs for TMC bookings. The Amex spokesperson explained that single-use VANs roll up to the master BTA account.
Some Acquis Consulting Group clients already are using the Amex BTA with virtual account numbers “in select markets,” according to principal Debra Moss. “The driver seems to be the TMC. In some markets, the TMC provides significantly better terms for using the virtual BTA due to the controls inherent in using a BTA and the security inherent in the VANs. If travel management companies begin to include the use of VANs as a driver for more favorable contract terms, there is no reason to think we won’t see an increase in the use of BTAs with virtual account numbers.”
TCG Consulting senior director Jim Coufal said the problem with traditional BTAs is less about fraud than it is the risk of excessive or unauthorized use. Amex’s enhanced BTA would help prevent that.
And it would help with reconciliation. Coufal noted that by combining its pre-existing virtual payment product with the BTA approach, Amex is creating a single reconciliation process through its online Corporate Account Reconciliation tool. He said that would make life easier for Amex clients and for the TMCs that support them.
MW Travel Consultancy principal Martin Warner said another big benefit would be additional use cases. “For example, virtual cards could now be used for the TMC transaction fee on a per transaction basis and therefore easily allocated to the individual transaction to which it is associated and to individual cost centers,” he explained. “Previously transaction fees were billed in batches on a monthly basis due to the fact that if attributed/charged to the BTA account, they were notoriously difficult to reconcile due to many (hundreds) of ‘same small amount’ transactions without a unique identifier to allocate to the right air transaction.”
Warner said he expected other payment companies to follow with similar products combining CTAs/BTAs with virtual account numbers.
An AirPlus official said the company has been doing it for years. “In all markets where we offer our AIDA virtual payment solution, it can be linked to our AirPlus Company Account,” according to the spokesperson. “This allows us to consolidate all expenses onto one invoice for a customer.”
Coufal said he has observed a general trend away from BTAs due in part to administrative costs. He pointed to fragmented data collection. It’s helpful when data from BTAs feed expense systems, he said, but most customers reconcile outside those systems and “are not getting data in one place.” Instead, some TCG clients opt for individual corporate card programs in a central bill/central pay configuration. That obviates the need to manage credit limits for employees while providing some of the same back-end benefits as BTAs.