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Virtual cards in the travel industry

by uma
Editorial & Advertiser disclosure


By Anjana Haines, Head of Content, The Payments Association

Before virtual cards emerged, paying with the company card on business trips would usually be a laborious process. It would typically involve numerous receipts, expense claims, or the risk of a payment being declined. So how have virtual cards suddenly revolutionised payments and made the process far easier for businesses travelling across the globe?

Secured by encryption, virtual cards are simply copies of a physical card that allow customers to pay online and in-store safely and securely via their digital wallet. Virtual cards offer effortless automated reconciliation and record matching, as well as the added benefit of a lower carbon footprint by not using physical plastic credit cards.

They quickly rose to prominence during the COVID-19 pandemic when the ability to make chargeback claims to refund money demonstrated the feasibility of virtual cards and how they offered protections that other payment methods lacked. Online travel agents (OTAs) were able to file chargebacks for purchases used to reserve flights when several airlines went into bankruptcy or cancelled flights.

Dave Robinson, COO and Deputy CEO of Pax2pay comments on the evolution and usage of

virtual cards in the travel industry in a new piece of research from The Payments Association:

“During the pandemic, we have never seen anything like it. When [airline] Monarch and [travel agency] Thomas Cook collapsed it was tough. However, nothing prepared us for what was coming down the line when it came to the Covid pandemic. We were literally processing thousands of chargebacks per day.

The media was full of reports over airlines not issuing refunds or giving credit notes. With chargebacks lots of people got their money back. Lots of companies now see the benefits, so they want to use virtual credit cards as their primary payment mechanism, knowing the protection is there and they can use it if they need to if the airline fails to deliver the service.” 

What are the barriers to virtual cards?

Firstly, complications will arise if your company wishes to switch from physical to virtual cards. It will need to update processes and rewrite company policies on card usage and expenditure. You will also need to consider how any new solution with their existing expense management, accounting or enterprise resource planning (ERP) portals will be best implemented.

Supplier acceptance can also be challenging. Suppliers who are comfortable with their tried and trusted payment methods, may be concerned about the merchant service charges associated with cards, or how they might impact settlement terms.

Despite widely held concerns regarding the integration of new solutions and costs, the benefits of virtual cards certainly outweigh these short-term difficulties. For example, accessing better payment processes, actionable data insights, and effortless compliance are key advantages virtual cards bring to the payments experience.

Moreover, SMEs that have had good experiences with virtual cards are far more likely to tap into additional financial solutions that could further help them grow their business.

With the right guidance and expertise in place, companies that embrace this new pneumonia will soon flourish and move beyond the companies sticking to the more old-fashioned payment methods.

Reaping the benefits of virtual cards

To get ahead of the opportunities presented by virtual cards, issuers, financial institutions and payment platform providers need to educate and inspire companies to innovate their payment methods. By demonstrating virtual cards as both seamless and secure, and by allaying misplaced concerns over costs, solution providers can help companies to deepen employee and supplier relationships, strengthen their foundations and position themselves

to take advantage of every opportunity in front of them.

Teaming up with the right expertise is crucial in order to get the best insight and the quickest route to market. It leverages complementary skills and strengths, and gives companies the smoothest implementation of new solutions, and the widest choice of value-added services.

As companies across more sectors see the tangible benefits of digitising payment and operational processes, virtual cards will certainly earn the positive recognition it truly deserves.


To learn more and download the whitepaper from The Payments Association, on the topic of virtual cards, visit:



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