August 1, 2017
The traditional travel payments system isn’t working.
Companies are wasting time, money and potential on an archaic system that doesn’t get the results that it could. But it doesn’t have to be this way.
Booking a holiday - be it a flight, a cruise, a hotel stay, or all the above - is a big decision. It’s a high consideration purchase that most people don’t take lightly. So any roadblocks in the path to purchase that create a poor CX (customer experience), equate to unhappy customers, high abandonment rates and, ultimately, fewer bookings.
The companies managing these multifaceted customer journeys have their work cut out for them. And nowhere is the challenge harder than for the online travel agencies, leisure travel agencies, suppliers and consolidators who have the task of managing the complex manual payment processes.
Handling these processes can take an extortionate amount of time and money, and beyond this, puts companies at risk of digital fraud, cyber attacks and data theft.
A VAN - or Virtual Account Number – is a unique 16-digit number that is generated each time a transaction occurs.
The number is linked to a specific funding account but it is the VAN, not the account number, that the supplier receives. They can be valid for a single transaction or they can be set for a certain number of transactions, certain monetary amounts, particular merchants or for a set period of time.
They are adaptable to the individual needs of an online travel agency, leisure travel agency, supplier or consolidator and can be used to pay suppliers quickly and efficiently. Steadily, they are helping to reinvent the B2B payment solutions landscape.
Fraud and cyber attacks are no longer distant threats - they are commonplace news stories in global media. And it’s not just small businesses with limited resources to allocate for security that are at risk. Cyber attacks grew by 50% last year, with high profile victims like the NHS and Danish transport giant Maersk highlighting the extent of the problem.
And the stats only get worse. Online fraud in the UK alone grew by 2% in 2016, costing more than £768m, with card payment fraud accounting for a whopping 80% of this amount.
VANs, however, put the control smoothly back in the hands of the companies that use them and away from increasingly sophisticated hackers. The streamlined process – being able to attach, in real-time, the supplier payment to the traveller booking - provides certainty throughout the value chain, and reduces the opportunity for vulnerability. Even if a hacker managed to steal a virtual account number, they wouldn’t be able to do anything with it as it will have already expired.
Working across multiple jurisdictions in different currencies can affect profit margins drastically. Brexit has weakened the pound against the dollar and euro, eroding travel industry profit for many UK companies.
VANs, however, are locked in at the time of booking, removing uncertainty and the chance of any profit being wiped out by a currency fluctuation.
Our recent creation, the CX Calculator, helps travel companies of all shapes and sizes see exactly what kind of ROI they can achieve through intelligently improving customer experience levels.
Automating B2B payment processes means that there is minimal manual (and often arduous) work to be done, contributing to a happier workforce in travel firms. The streamlined and efficient process speeds up processing which is great for all parties involved, be it a travel agent, supplier or end booker.
The online travel industry currently spends around $1.5bn a year on manual processing and as much as 40% of the industry still relies on this method. But by automating with a VANs payment solution, businesses can cut down on IT and accountancy costs and spend valuable time and money more effectively and creatively.
VANs enable travel companies to expand very quickly and easily into new jurisdictions. How? They are accepted anywhere where Mastercard is online, meaning they are accepted in over 70 different countries and across more than 35 different currencies.
Instead of having to set up payment processes in each new country (taking time, money and management), companies can simply generate VANs which will be accepted in that country because of its connection to Mastercard.
This flexibility across borders, time zones and currencies makes everything more seamless and efficient. And as VANs are easily integrated into existing travel booking workflows, it’s easy for travel companies to incorporate them into their current strategies. The sky really is the limit when it comes to expansion and growth.
The travel sector might be complex, especially in the world of B2B, but payment processes don’t have to be. They can be safe, efficient, and create a CX that ensures happy customers and better business performance.
Our mission at eNett is to provide inventive yet practical payment solutions across the industry and to completely transform the space as the world knows it. Watch this space.