Single-Use Virtual Accounts Gaining Popularity Among Business Travelers
ALEXANDRIA, VA – June 30, 2015 –About 20 percent of American businesses today pay for travel using cardless single-use “virtual” accounts, up from 13 percent last year, according to a new study by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA). Meanwhile, the survey found that a majority of travel suppliers are accepting single-use virtual accounts — 53 percent. This gain in popularity for a relatively new payment method likely stems from an increase in marketing and educational efforts by the industry.
The Buyer and Supplier Outlook on Virtual Payment Solutions study, sponsored by U.S. Bank, surveyed more than 220 U.S. travel buyers and travel suppliers to gain a better understanding of which types of business travel payment solutions they prefer. The results confirm the growing popularity of virtual payment solutions, with those buyers who have adopted single-use account solutions reporting satisfaction with the controls, compliance and data reconciliation benefits that the technology delivers.
Unlike more traditional central billing solutions such as Central Travel Accounts, single-use virtual accounts use a unique account number created and authorized for a specific transaction amount, date of use and merchant category. When a traveler makes a booking, the travel supplier receives a unique account number, and must charge the account within a designated time frame and for a designated amount. Following payment, an automated reconciliation process matches the travel booking with the transaction. The process reduces paperwork, potential errors and labor costs while producing a transparent view of travel spend for supplier and buyer alike.
Although usage is growing, the findings suggest opportunities for process enhancements that would drive greater adoption. Approximately one-third of travel buyers still report a lack of familiarity with single-use virtual account solutions. Suppliers who don’t currently accept single-use account payments express concern about confusion at the point of sale, indicating a need for the industry to find a better way to transmit account information from booking systems.
“Advances in payment solutions and the growing popularity of virtual payments represent a positive trend for travel buyers,” said Joseph Bates, GBTA Foundation vice president of research. “These new payment solutions provide travel buyers and suppliers with increased control and improved efficiency of payment processing, all while making the traveler experience more hassle-free.”
“The survey findings show promising growth in adoption of single-use accounts for travel payment,” said Mary Miklethun, head of Large Market Commercial Card Product & Marketing for U.S. Bank. “At the same time, they underscore the opportunity to keep customers updated about the financial and security benefits of virtual payment technology and tee up even stronger growth.”
Other key findings within the report include:
Travel buyers tend to use more than one type of payment method, with 82 percent using two or more payments and about two-thirds using virtual payment methods alongside corporate card programs.
Although a minority of travel buyers use single-use virtual accounts currently (20 percent), among those who do, they tend to be satisfied. Some travel managers are particularly satisfied with elements such as controls and compliance, data reconciliation and management capabilities and security and protection from fraud/misuse. By comparison, a larger percentage of Travel Suppliers accept single-use virtual accounts (53 percent) and are also satisfied with the process.
Future Opportunities for Single-Use Virtual Accounts
Among non-users, travel buyer familiarity with single-use virtual accounts is on the upswing. In the 2014 study, only 23 percent of travel buyers said they were “familiar” or “very familiar” with this type of account. Today, that number stands at 39 percent and with increased education and marketing there is an opportunity for that to continue to increase.
According to the survey, if buyers’ rates of implementation of single-use virtual payment accounts increases to match suppliers’ adoption rates, we could see marked growth – possibly in the near future – in this industry segment.
The current study is based on an online survey of 229 U.S. respondents, of which 65 percent are travel buyers and the majority of remaining respondents are travel suppliers (30 percent). All respondents have some level of responsibility in making decisions about payment solution providers and policies.
Bates and Miklethun will delve into greater detail on the study’s findings in an education session at 10 a.m. Tuesday, July 28 as part of GBTA Convention 2015 in Orlando.
The study, Buyer and Supplier Outlook on Virtual Payment Solutions, is available exclusively to GBTA members by clicking here and non-members may purchase the report through the GBTA Foundation by emailing [email protected]
CONTACT: Colleen Gallagher, +1 703-236-1133, [email protected]
About U.S. Bank
U.S. Bancorp (NYSE: USB), with $410 billion in assets as of March 31, 2015, is the parent company of U.S. Bank National Association, the fifth-largest commercial bank in the United States. The company operates 3,172 banking offices in 25 states and 5,016 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at https://www.usbank.com/index.html.
About the GBTA Foundation:
The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world’s premier business travel and meetings trade organization headquartered in the Washington, D.C. area with operations on six continents. Collectively, GBTA’s 7,000-plus members manage more than $345 billion of global business travel and meetings expenditures annually. GBTA provides its growing network of more than 28,000 travel professionals and 125,000 active contacts with world-class education, events, research, advocacy and media. The Foundation was established in 1997 to support GBTA’s members and the industry as a whole. As the leading education and research foundation in the business travel industry, the GBTA Foundation seeks to fund initiatives to advance the business travel profession. The GBTA Foundation is a 501(c)(3) nonprofit organization. For more information, seegbta.org and gbta.org/foundation.
Acerca de la Asociación Global de Viajes de Negocios
La Asociación Global de Viajes de Negocios (GBTA) es la principal organización comercial de viajes de negocios y reuniones del mundo con sede en el área de Washington, DC y operaciones en seis continentes. Los más de 9000 miembros de GBTA administran anualmente más de $345 mil millones de viajes de negocios globales y gastos de reuniones. GBTA y la Fundación GBTA brindan educación, eventos, investigación, defensa y medios de clase mundial a una red global en crecimiento de más de 28,000 profesionales de viajes y 125,000 contactos activos. Para aprender cómo los viajes de negocios impulsan el crecimiento empresarial duradero, gbta.org