What’s on corporate travel planners’ minds this year? Virtual payment cards. Ninety percent of travel planners surveyed by Mastercard in April said they expect virtual cards to become the dominant approach to booking corporate travel within the next five years.
This year’s Global Business Travel Association Convention (GBTA) validated that line of thinking. Event attendees were keen to hear more about payment and virtual card solutions. Luckily, there were several educational events about virtual payment to choose from, and they focused on companies’ transition to virtual cards and the impressive results they’ve seen.
So, what is behind all the excitement about virtual corporate cards? It all comes down to what travel managers and finance teams experience in travel and expense every day. Unfortunately, their experience includes many manual processes and sticking points like:
- Time-consuming expense reports and reconciliation
- Compliance and control concerns
- Corporate payment fraud
- A lack of data insights
- Manual reimbursements
And the manual work keeps piling up. Business travel grew another 30% between Q2 2022 and 2023. As business travel continues its rebound and organizations want to dive deeper and identify travel expenditure patterns, travel managers continually hunt for more information about monthly expense report entries.
Why is reconciliation still so difficult in 2023? Personal card usage is partially to blame. According to research from Mastercard, one-third of travel decision-makers say their employees are still using personal credit cards to book travel! Meanwhile, traditional corporate cards don’t provide enough visibility for controllers to identify out-of-policy spending quickly or provide enough insights to help finance leaders optimize their travel and expense strategy.
Introducing virtual corporate cards
Virtual corporate cards work exactly like any other pre-paid corporate or bank-issued corporate credit card. They are as easy to use as Apple Pay or Google Pay and are accepted on-site and online. However, there’s one big difference: they automate time-consuming expense tracking. Companies can create virtual corporate cards in just a few clicks, making funds instantly available to employees who need them for travel.
Virtual payment cards give organizations real-time visibility into spending. Plus, spending data can be integrated with accounting systems, making settlement faster and easier and removing human error.
Virtual corporate cards are as easy to use as Apple Pay or Google Pay and are widely accepted online and on-location.
How are companies using virtual cards today?
Virtual corporate cards provide multiple benefits:
- Improve the employee experience while traveling
- To cover emergency cases and one-off purchases or events
- Improving the Finance team’s experience, post-travel
- Achieving corporate goals, such as getting more precise data insights
Let’s take a look at each of them in more detail.
Improving the employee (and non-employee) travel experience
GBTA Convention attendees were passionate about improving the employee experience. One way to do that is to streamline policy compliance before travel begins. With virtual card spending limits, travelers don’t have to read extensive travel policy documents, and accounting teams don’t have to worry about non-compliant spending.
Making employees and contractors use personal payment cards for work-related travel expenses is a big ask. The cost of living has increased, and leaving employees to pay out of pocket and wait for reimbursements can create a lot of financial and emotional strain. Not only are virtual corporate cards easy to issue - they eliminate the need for employees to rely on their bank accounts to get work done.
On a business trip? Stuff happens!
Another pain point arises when employees are away on trips. If an unexpected cost occurs and an employee’s payment method isn’t approved automatically, it causes frustration. When employees are stuck waiting at the front desk or making phone calls to resolve payment problems, they have less time to focus on the higher-value work that they came to do.
Or, an employee may leave their physical corporate card at home. Creating and assigning a virtual corporate card is a nearly instant solution to problems like this.
Let’s face it: travel disruptions, incidentals, cancellations, and rebooking are all a part of travel. Requiring traditional credit card authorizations upfront isn’t a solution for modern travel. Virtual cards are a better solution, helping you maintain productivity, control spending, and reduce fraud.
Streamlining your Finance team’s work
Finance teams are tasked with a lot of manual work, including filling in forms for receipt collection and reimbursement, extensive reconciliation processes with a lot of back-and-forth communication, and manual reimbursement. Virtual cards alleviate these by providing better data and automating reconciliation.
View team cards and spending trends on a simple dashboard. The “reconciliation hunt” is over.
One speaker at the GBTA Convention explained how virtual pay transformed their finance department. It took them from having a monthly “hole” of spending, which was next to impossible to reconcile, to possessing end-to-end data points on each passenger’s record. Another speaker said virtual corporate cards gave their teams 25 minutes of productivity per booking. They no longer needed to call hotels to confirm the receipt and filing of credit card authorization forms — and those tasks added up fast.
Virtual cards capture expense details at the point of transaction, giving your team immediate, automatic reconciliation. Your team gets the needed data while eliminating the need for paper receipts and spreadsheets, which frees them up for more strategic work.
Achieving organizational goals with virtual corporate cards
Compliance and control are top of mind, and business leaders want to identify opportunities for travel spend optimization. However, disparate payment systems and personal cards make data very difficult — if not impossible — to structure and use. Traditional corporate cards don’t provide much information about individual purchases in monthly statements, leaving you wondering what was purchased and why.
With the additional data points that virtual cards automatically provide, Finance leaders gain new visibility. They can identify unnecessary spending, optimize their travel policies, and identify new opportunities for savings.
In addition, virtual cards provide much-needed insight for companies that are working hard to crack down on fraud and out-of-policy spending. Proactive budget controls and clear, itemized spending data make it simple to see who made purchases and what for. No more unpleasant surprises after purchases are complete. This level of visibility simply isn’t possible with shared corporate cards. Plus, by assigning virtual corporate cards to individuals, you’ll always know who uses each card.
What’s next? The future of virtual cards
We’re on track to see virtual corporate cards become more and more commonplace. Mastercard’s Navigating Global Business Travel research found that 92% of corporate travel planners are interested in providing virtual cards to their employees to pay for trip expenses. In comparison, 88% are interested in providing them to non-employees.
Virtual cards are just one piece of the puzzle for simplifying travel expenses and creating more convenient mobile experiences for employees on the road.
Ready to learn how Emburse is helping companies streamline expense management with virtual corporate cards? Read our guide to virtual corporate cards and discover how they help teams save loads of time on reconciliation at month’s end.