By John Sturino, Vice President of Product and Technology at Egencia

With the pandemic giving rise to an even more touchless, contactless economy, the plastic card has become even more critical in recent times. However, in the business travel industry, disruption is on its way in the form of virtual cards.

Virtual cards are the digital-only, temporary twins of those that sit in our wallets and can still be used digitally with a pre-approved supplier. For business travel, companies can either provide the card number directly through the corporate travel booking system or users can download a dedicated mobile app. The result is a faster, easier, and more secure way of paying for business travel.

The rise of contactless payments to an ubiquitous level during the pandemic has prompted many individuals and companies to ‘go cashless.’ Virtual cards are a logical next step in that journey, and for business travel, we expect to see an exponential increase in their use driven by several key trends.

Travel budgets to be placed under the microscope

The economic pressures created by COVID-19 have increased scrutiny on budgets in every department, and business travel is no exception. A Morgan Stanley survey of 140 travel managers revealed that more than half (52%) expect their 2022 travel budgets to be somewhere between 11-50% lower than in 2019.

In this environment, corporate travel managers must demonstrate that travelers comply with company policies and that travel programs deliver the expected ROI. Virtual cards can be a highly effective way of promoting compliance with policies, gaining greater efficiencies and insight into travel spending.

Companies using virtual cards enjoy centralised visibility of their spending, enabling improved budget control and quick access to actionable insights. This approach streamlines a corporate’s often- complex spend reporting, reconciliation, expense, and invoice management processes.

Further, providing travelers with a digital one-time-use virtual credit card and sharing it directly with approved travel suppliers helps prevent fraud and streamline post-trip expense report processing.

User experience is everything

We now live in an era where an impeccable user experience is ultimately an expectation, not a desire. In this context, virtual cards offer clear benefits to the end-user both before, during and after a trip.

Without the need to distribute cards physically, virtual cards can be provisioned to remote employees instantly, helping to make onboarding new employees even simpler.

Contactless payments have become the norm, making it easier for travellers to use virtual cards for all travel-related expenses – from the ride shares to and from the airport or morning coffees– making expense management much less painful.

Similarly, submitting individual expense claims can be eased through a dramatically simplified expense process at the end of a trip, with automatic expense reconciling of a hotel or flight against the employer’s virtual card.

Employees can also link a physical card with a virtual card and sync all trip purchases with spend management platforms automatically.

Personal debt

Perhaps the biggest pain point for business travelers is accumulating personal debt for business expenses. Virtual cards address this directly, eliminating the need for business travelers to dip into their own pockets by ensuring the most significant spend categories on a trip are paid directly from employer to supplier.

Personal debt levels are unfortunately rising partly because of COVID-19. A study from LendingTree revealed 36% of US consumers went into debt in December 2021 by an average of $1,249.

Employers must remain aware of this and work to alleviate the potential stresses of unwanted employee expenditure. Virtual cards offer a smooth, seamless, and fair solution, ensuring business travelers don’t suffer financially due to their trip.

Given the benefits, we see virtual cards soaring in popularity as business travel continues to rebound. From improved budget visibility to user experience enhancements, virtual cards represent new, disruptive, and exciting development in how travelers pay for trips.