Virtual cards are still a work in progress, but Riot Games travel wizard Sean Parham isn’t ready to give up on them. He’s now on his second try. The intended benefits — reduced fraud, easier reconciliation and a seamless traveler experience including an easier expense process — are just too tempting.
Last year Parham pulled the plug on a program through CSI globalVCard meant to go live on Oct. 1 when Riot Games switched travel agencies to Adelman Travel. He said the credit qualification process bogged down the initiative for months. That was partly because Riot Games is private and doesn’t freely share financial info, and partly because the company found CSI’s process too onerous.
A few weeks ago Riot Games started another attempt, this time through Adelman, AirPlus International and Wex. Parham said credit approval only took three weeks, but he faces other familiar frustrations.
Even so, travel management companies and virtual card program providers are bullish and point to progress in resolving some of the obstacles.
“In every bid or every discussion with a customer, there is interest there,” said Adelman president and COO Steve Cline.
A primary motivator is partially automating the traditional hotel prepaid process. That’s the reason AmTrav is pushing. President Craig Fichtelberg said the TMC built an API to transfer “the administrative burden” to the virtual card company. To encourage clients, AmTrav will process prepaid virtual card hotel bookings through its website for free.
The rationale behind all the buzz sounds great, but the details can be a buzzkill.
Sources say a big roadblock is getting hotels on board. It’s hard for some properties to distinguish reservations made with physical cards that travelers would present at check-in from those made with virtual cards. Front desk personnel often can’t find or make sense of the faxed authorizations.
Parham understands the dilemma. “If I was a front desk clerk working at the Days Inn, I wouldn’t know what to do about it either,” he said. He also said that in the first few weeks of Riot Games’ new program, not a single hotel booking outside the United States worked properly.
Is the task of engaging hotels on v-cards up to payment companies, travel agencies or end-user clients? “That’s where the disconnect is,” Parham said.
The hotel industry is making an effort toward standardization through the Hotel Technology Next Generation trade association.
CSI SVP Juliann Pless doesn’t see hotel cooperation as such a problem. She said the company, its customers and their TMCs all are communicating their needs to hotels. Pless expects more chains to buy in this year, but acknowledged that training hotel front desk staff is an issue.
An AirPlus official also said hotel willingness is not a very big problem, at least not in the United States and Europe. Elsewhere, the company works “directly” with its customers’ most used chains.
That’s just one hurdle.
One well-known purpose of virtual cards is establishing a preset spending limit. To cover taxes and parking, Riot Games adds 30 percent on top of the hotel room rate for a given single-use v-card. “But we are finding that if the hotel charges the room and tax, and then a separate charge for parking, it is declining and not going through,” Parham said. He’s anticipating a related issue for reservations at Las Vegas hotels, which require a deposit for the first night at the time of booking.
Virtual card companies, though, say such situations don’t need to be problematic. Those interested in v-cards shouldn’t get hung up on the “single-use” concept. Instead, v-cards can be configured as single-stay. The merchant, spending limit and date range remain the same as users conduct multiple transactions. “It comes down to setting up the proper conditions of use at the time of v-card generation,” according to AirPlus.
Conferma director of strategic relationships Paul Raymond said his company has addressed the issue of multiple transactions for a single virtual account number with all its banking partners. He called that a “must-have” in corporate travel. Another example is the traveler who gets snowed in and stays at the hotel for another night. “You need the TMC or card partner to talk with the bank to add additional funds,” Raymond said.
Getting The Fax Straight
Many mock virtual card programs because of their reliance on archaic faxes. They are PCI-compliant, whereas unencrypted emails aren’t, but still present problems. The obvious one is that they can be misplaced at hotel properties. That creates confusion at check-in.
At Riot Games’ main hotel near headquarters in Santa Monica, 21 employees stayed on a recent night. The virtual card program is configured to send a fax two days before the traveler checks in and then on the day of arrival. For that one night, that meant 42 separate faxes sent to the hotel. “Not perfect at all,” Parham said.
Moreover, Parham said the language on fax authorizations is too basic, lacking clear instructions. “From a legal point it doesn’t really have anything on it,” he said. So Parham worked with his legal team and redesigned the fax authorization template himself.
Mobile apps from some v-card providers can ease the pain. They allow travelers at check-in to show or transmit payment details from their device. The AirPlus app also enables a traveler “to generate a new v-card number during their trip at the moment they need it,” according to an official. “This feature is managed by the travel manager and they determine all the conditions of use.”
Some chains have obviated faxes. Built with Travel Incorporated and Travelport, Choice Hotels’ process works for self-booked and agent-assisted reservations for clients with corporate discounts, according to Travel Incorporated senior vice president of business development Tony Peter.
In the United Kingdom, Conferma worked with Premier Inn and Travelodge to dispense with faxes by using web services and XML messaging. Payment info and instructions are sent directly to the hotel’s property management system.
“The initial booking goes through the GDS, and then this supplementary communication goes to the hotel,” Raymond said. “We are trying to make this a ubiquitous solution.” For now, though, most hotels rely on faxes.
When asked about an acceptable failure rate, Parham said he’d be content if 50 percent to 60 percent of hotel transactions flow through v-cards successfully. That’s a far cry from the 90-plus percent he wants for online booking adoption and other travel program components, but “still 50 percent more than before,” Parham said. “The breaking point will be how much time we have to invest to correct the failures with individual hotels.”
Casto Travel president Marc Casto last year said that while clients like the v-card concept, “we have had significant challenges with the hotel using them correctly. They’ll say, ‘We can’t process this until we have that. You want to sit here while I call my supervisor?’ That kind of stuff.” At that time, Casto was seeing an error rate near 50 percent. Contacted this week, Casto said it’s now closer to 15 percent. “Still very significant given the volume that occurs,” he said.
In a 2015 report, BCD Travel estimated that 20 percent of hotel payments on v-cards require a human to step in.
When problems occur, perhaps a bad fax number, Adelman has a protocol in place. “We try to focus on doing everything possible to ensure that the transaction was transmitted correctly and documented correctly,” said CIO Ivan Imana. “At some point there may be some manual intervention required for that failure.”
Jeannie Eisenhart has been poking around with virtual card program providers. The director of talent acquisition and employee services at Crowley Maritme said a beta test with one didn’t allow for changes and cancellations. Agents found it easier to manage those requests themselves. Looking at other options, Eisenhart discovered that integration with the Concur tool isn’t there yet. In another case, too much internal IT work would have been required.
With his finance director boss asking how long he’ll give it, Parham is going to stick it out for at least 90 days. “In the long-term it may turn out to be still a better solution,” he said. “The situation prior was so much worse than we have now.”
Riot Games has a traditional corporate card program but not many of its 2,400 predominantly millennial employees (average age: 24) have cards. So the company does lots of prepaying anyway.
Then there’s reconciliation. Riot Games has as many as 700 hotel transactions each month. An admin has been spending two or three weeks reconciling them because card transactions don’t return rich detail. Some big chains have committed to providing that detail, but the company’s travelers use plenty of hotels that haven’t. “The admin is going through folios, calling hotels, playing detective every month,” Parham said. “And every month a percentage is not reconciled and goes into the general ledger.”
He’d view it as a win if that admin could spend maybe just one week a month on that task.
Service providers and travel managers who have explored v-cards encourage careful planning and patience. Imana advised clients to be sure a v-card program doesn’t mess with existing travel management automation, including online bookings. “You don’t want to trade one thing for the other,” he said.
BCD Travel’s report cautioned that such a project requires “ample time and resources into getting your program up and running. You’ll need to coordinate with many internal and external stakeholders.”
Pless suggested beta tests with small subsets of travelers before wide roll-outs. She acknowledged that uptake for some clients is slow. “There is a hesitancy to change, especially for a program that has been running smoothly,” she said. Regarding the front-end credit approval process, Pless said the timing varies because each company is different. She said it is usually pretty smooth, but not always.