Virtual Payment: Just (Kill) The Fax

By | October 29, 2015

Virtual payment remains a hot topic in managed business travel. The benefits for companies that employ non-cardholding travelers are clear. Not resolved, however, are the headaches associated with faxing card authorizations. Travel managers wonder why the hotel industry can’t get its act together. It’s not as easy as they would hope.

Choice Hotels has received praise for one initiative it’s testing, but that’s a stopgap. The real solution is in the works at the Hotel Technology Next Generation trade association. Its Virtual Credit Cards Workgroup in the spring released a related technical specification. Implementing this spec would flag for hotels that a given credit card number in a reservation represents a virtual card. It also would communicate associated usage rules. Currently, buyers can only hope that hotel personnel keep track of faxed authorizations and know what to do with them. If they don’t, the traveler or front-desk staff may have to track down the corporate manager or a travel agency representative.

Image: Thinkstock

Image: Thinkstock

“I have been using virtual cards for three years,” said Open Society Foundations global travel manager Chris Gremski. “The problem is that the fax is not tied to the reservation. The card image is faxed to the hotel after the reservation is made and is sitting somewhere in a a pile of junk faxes. I once had guests sitting in a hotel lobby for hours waiting for someone to resend the authorization. It’s a huge issue everywhere, and the hotels need to find a way to handle it.”

Stonegate Mortgage travel manager Monica Whitehead said, “I’m in fax hell all the time. It’s a nightmare.”

Mobile apps can help travelers if they’re trying to check in with a clueless front desk clerk. Travel agents or managers can make proactive phone calls to properties. Adelman Travel’s co-branded virtual card with U.S. Bank incorporates a “proprietary faxing and imaging solution” that records fax confirmations. Depending on how far in advance a reservation is booked, Adelman continues sending faxes to hotels at customer-defined intervals before arrival. “Then we can also incorporate manual follow-up,” the company noted.

As outlined by the HTNG group, the problem is that “there is neither a way for hotels to distinguish virtual credit cards (and other card not-present situations) from traditional ones, nor a systematic way to communicate the business rules, payment instructions, terms and conditions of using them. This results in inefficiencies, security and PCI compliance issues, declined payments, poor customer check-in experience and additional back-office processing.”

HTNG last month published a handbook on virtual payment for hoteliers that outlines some of the challenges. Now it’s trying to get the word out to all the players in the chain, and there are many. Payment companies have work to do. Global distribution systems are deeply involved and the booking systems that use them may need alterations. Hotels use a variety of internal central reservations systems and property management systems. Complicating matters, some hotel chains use multiple PMSs. And some PMS providers have multiple software versions in production.

In short, this is going to take some time.

“For the business travel community, there’s hope things will get better,” said HTNG COO David Sjolander. “But it will take a while because there are so many systems involved. All these systems need to implement our standards. It will be a gradual process. We can’t turn a switch and make it all work.” The good news is that it shouldn’t be too expensive. “These types of enhancements just involve adding a few fields,” said Sjolander. “These are sort of normal enhancements.”

Paul Raymond is director of strategic relationships for virtual payments company Conferma. “Creating a specification is a really positive step and means everyone will have something to work to,” he said. “The challenge is getting the people in that supply chain to commit to delivering that data throughout the process. If one of them doesn’t, the whole process may fall down.”

“Getting rid of the fax a high priority” for virtual payments firm CSI Enterprises, according to a statement from VP of travel and mobile solutions Juliann Pless. “We are working with our hotel partners to understand what needs to take place.”

Sjolander said the specification is new enough that he would be surprised if anyone has begun coding to it. He said the GDSs are the lynchpin. “All three major GDS companies participated in the workgroup, so I am hopeful that they will prioritize the changes into their development cycles,” he said. “However, I don’t have a specific timeline.”

The GDS companies offered some general statements.

Amadeus supports the standards initiative. “As with all industry standards, the initiative will only work if it is adopted by the industry as a whole so we would also encourage all participants – including property management systems, hotel chains and card issuers – to work on adoption,” according to a media relations official.

A Sabre spokesperson indicated that the company “welcomes the recent modifications in the hotel reservation messaging standards to identify virtual card transactions and will seek to enhance that process in future releases.”

According to a Travelport official, the company before HTNG released its specifications “developed a structured set of GDS codes that enabled agents to, amongst other things, flag the payment card in any booking, against any rate, as single use.” Travelport called that “a more efficient alternative to the industry resolution of free-text fields in the GDS booking, supplemented by what many consider an archaic, but ubiquitous, fax process as back up.” As with the standards, however, “in order to realize the full benefit of our development, hotels need to hand this down through their systems to the property, which will require development effort and resources.” The official called Travelport “aligned to the HTNG virtual card principles.”

The Choice solution requires some manual intervention. It utilizes a field in reservations records that was not designed for this purpose. Sjolander said he was told Choice plans to move to the HTNG specification. Choice did not offer comments by press time.

Get It In Writing

As they wait for solutions, corporate travel managers are “a whole lot angrier than the hotels,” said Sjolander. “There’s pent-up passion among that group.”

Some travel buyers include v-card acceptance requirements and lost-fax instructions in hotel rate requests for proposals.

“We’re working with customers as part of the RFP process,” said Conferma’s Raymond. “They ask hotels, ‘Do you understand what it is? Can you accept it?’ This is a relatively recent development. We have seen that there are business discussions taking place where if a hotel provider is not supporting that process, it’s being pointed out that they need to. We’re also seeing it included in corporate RFPs to TMCs.”

Additional info: Several large hotel chains declined to comment. HTNG workgroup members include the three major GDS firms; Hilton, Marriott, Starwood and some smaller chains; payment firms such as Travelport’s eNett, U.S. Bank, Visa and Wex; and hospitality tech providers including Infor, Oracle Hospitality, Pegasus Solutions and Tac GmbH.

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Author: Jay Campbell

Jay Campbell in 2004 created travel business newsletter The Beat, in 2006 co-founded Travel Procurement magazine and in 2010 integrated them into Northstar Travel Media's BTN Group. He served as editorial director until 2013. Jay made his travel industry media debut in 1993 at the Air Travel Journal of Boston while earning his undergraduate degree in journalism at Boston University. More on LinkedIn.