Travel management has come a long way from the days when the role sat within facilities and the travel manager's main task was to manage the firm's business travel bookings and to iron out any potential difficulties such as finding a traveller a room in a 'full' hotel.
This process-focused role evolved into a strategic one which focused on cost control and required professional skills in issuing RFPs, negotiating contracts, benchmarking suppliers and collecting data for KPIs. It thus moved to procurement and the role is evolving once again.
Travel management and the future of digital payments
Corporate payment solutions used to be a straight choice between invoices, lodge cards and credit cards. These are not just a means of payment but also a valuable means of assembling data. The advent of digital payments is thus adding more potential for strategic travel management.
Incorporating digital payment solutions such as virtual and single-use cards as well as mobile payments into a travel programme can increase visibility of spend and compliance, strengthen controls and make life much easier for travellers.
Movement in procurement is driven by the economics behind it. Understanding how the workplace is changing will help us determine how we need to adapt our management techniques in the future.
What's driving these changes
1. The technology
Payments and travel technology is now accessible via the cloud. This means that companies no longer have to have their own corporate platforms but can make use of cloud technology and SaaS (Software as a Service) solutions from multiple suppliers. Accessing suitable technology and the ability to change from one platform to the next is also much easier than it used to be.
The ease with which organisations can change from one technology platform to the next is largely driven by SaaS software. Companies are moving from buying and owning their own IT and software to SaaS solutions.
This is the corporate equivalent of the sharing economy. For a fee you can make use of an Uber vehicle which is owned and managed by someone else. For a fee you can use and gain benefit from someone else's payments technology.
2. The traveller
Many of the tools that employees use to access leisure travel content such as mobile devices are now creeping into the workplace. Business travel management specialists are all focusing on leveraging proprietary technology to make it easier to buy travel to get from A to B. The changing role and expectations of travellers are behind the introduction of consumer-based technology.
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Alternative methods of payment such as mobile are increasing. ©Martin Dimitrov/iStockConsumers are now using plastic cards less and less. New payment options are not just virtual and single-use cards, but mobile payments. We live in a world where mobile technology exists in the smartphone in travellers' hands while plastic cards are shoved deeper into people's pockets.
A larger and larger number of transactions — from entering and paying for underground and subway journeys to purchasing a cup of coffee — are paid for via a smartphone rather than a plastic card.
This is a worldwide trend. There are certain markets in which credit cards have been bypassed altogether and consumers have gone straight to mobile solutions.
3. The process
Booking travel is an automated and unskilled process. The travel managers' challenge is not to process the bookings per se but to tie the whole process from booking through reconciliation and payment to expense management all together. And this is being powered by a revolution in the world of payments.
Reconciling the spend with the booking can be onerous and time-consuming. A sound payments strategy including a virtual card programme will reduce manual reconciliation and therefore costs significantly.
The growth of digitised payments
The changes in payments technology, traveller behaviour and process link the whole travel management process together by means of the underlying payment infrastructure. Payment for travel has become much more seamless because of digitised payments such as single use or multiple use virtual cards. They also produce much valuable data.
Digitised payments are flexible enough to be adapted to support a company's corporate strategy.
Virtual cards can be configured for use as befits a corporate culture. They are especially appropriate as a means of payment for non-employees such as contracted staff and infrequent travellers. A single-use or multiple use unique number is tied to a booking which means that any payment can be linked with a specific trip and a specific user. And because cards are nothing more than access to a line of credit, virtual cards are also assigned a value — either a specific figure or a ceiling for the amount that the corporate has authorised to spend.
Cards can be configured to a corporate's specification — some will be precise and, for accommodation, say, set to a specific value such as room rate only while others will be to a pre-set ceiling to include incidental spend on extras such as car parking or an evening meal. By the same token a single card can be used for multiple items on a single trip or different cards can be issued for different elements — air, hotel, car rental — of the same trip.
No matter how it's done, the effect is the same — that actual travel and spend rather than just planned travel and spend (the booking) can be reconciled with a specific traveller and booker, paid for and the data captured via an expense management system.
These can be used as part of a mobile solution via an app as well.
Mobile payments via such solutions as ApplePay or Android Pay allows for payment at the point of sale — just as a corporate credit card — but with the data collected as a matter of course and, if an expense management solution is involved, automatically fed into the reporting.
The benefit
Digital payments have the capacity for automatic reconciliation with a booking and collection of data.
This is a very powerful benefit for any travel manager because there is value in analysing both intended travel and costs and actual travel and costs.
TMC data, unless otherwise configured to take additional feeds, will reflect only what has been booked and the budget holder planned to spend. However, new plans or external factors plans can often mean changes to itineraries.
Payments data capture what has actually spent and reconciliation of that data with the bookings data is powerful not only to validate the purchase but to aid in understanding the actual travel needs of a company's executives and improve compliance to company travel policy.
All travel managers should carefully review their corporate payments options. Paying bills can happen in many ways. In the future a payments strategy that incorporates digital solutions will be the seamless way of obtaining accurate and powerful data.