Card payments across Europe totalled over € 3.8 billion in 2020. And as contactless buying soars, virtual cards are coming into their own.
Digital Payments are on the rise
Digital payments became a vital link for travel firms in charting the COVID-19 pandemic last year. And as contactless becomes the norm, older manual systems in the realm of travel are fast being replaced. Both merchants and buyers stand to gain from digital payments. From refunds to closing B2B payments, digital payments help to improve cash flow and settlement time. They also help travel firms to create seamless payments and design zero-touch experiences for clients.
And as travel slowly opens up, digital will give the much-needed push to speed up recovery and growth.
Travel in a Post-COVID World
People are starting to travel again, but it will be a while before numbers return to pre-pandemic levels. Industry experts predict that much will change when it comes to business travel, though. There is a greater focus on responsible travel and cutting carbon emissions. And more people are either working from home or remotely. All of this is making more businesses rethink their approach towards business travel.
As travel slowly rebounds, here is what we are currently looking at:
- Travel is expected to reach pre-pandemic levels in the next 2-3 years.
- Market trends spawned by the pandemic are here to stay, especially contactless buying.
- Touchless payments such as virtual cards will play a major role in speeding up travel recovery.
Virtual Cards in Travel
Before the pandemic, travel cards were fairly niche. But things have changed. A greater focus on safety and touchless payments has led to virtual cards finding favor amongst travellers.
Last year, airlines and travel companies had to process a high volume of refund requests. This has led to a spike in the use of virtual cards. Travel firms that used virtual cards for B2B payments reported faster real-time payments, lower reconciliation costs, and better cash flow management.
At the same time, the needs of business and leisure travel are getting more specific. Everyone is looking at ways to manage their travel budgets better. Virtual cards are changing how a company or an individual opts to cover travel costs – from booking an airline or hotel to making payments to partners.
What is a Virtual Card?
A virtual card is not a physical, plastic card. Rather, it is a set of sixteen digits similar to a credit card number and a CVV code that is randomly generated using software. Virtual cards can be either credit or debit cards. Virtual cards are secured by encryption, and they are faster, safer, and more convenient to use.
When you apply for a virtual card, you will be given a prepaid account with a unique 16-digit number. When you put funds into your virtual card account, you can start using this number (along with the CVV code and expiry date) instead of your physical card. You can use it for online payments, money transfers, contactless in-store purchases, and even ATM withdrawals in some places.
How does a Virtual Card Benefit You?
Unlike physical cards, virtual cards are handy for instant use. You can start using your virtual card within a few minutes of opening an account.
Virtual cards offer more secure and private transactions as they cannot be traced back to the actual credit/debit card account or to the person who owns it. Plus, virtual cards allow you to limit the amount of info you share when making any purchase. This makes it easy to protect a user’s personal details.
Virtual cards allow you to make all payments from the same device. You can keep spending limits, connect with select merchants, and receive alerts and updates on all payments. It also offers multi-currency options, which makes cross-border payments much easier.
What does the Future hold?
As people seek to resume travel, they are demanding safer, more secure services. Virtual cards give them a seamless and secure payment experience and thus helps people to make more confident choices. Virtual cards contain many value-added features that help buyers to manage their expenses better. As such, virtual payments are a great tool that helps travel firms to stay abreast of market trends and changing needs of travellers.
The travel industry is taking a fresh look to make travel a whole lot safer and richer. And payments service providers will play a vital role as their partners in charting out the future of travel.