How this tangled new world of NDC and changing booking and buying habits will impact payments systems remains to be seen. Some innovations in the corporate payments space, such as virtual cards, have not yet created the full-scale disruption they were intended to. And inflexible legacy systems can make integrating new payments technology clunky.
So how exactly will payments evolve in this new world order of business travel management?
The end-to-end booking process, and especially payments, are ripe for innovation, says Greeley Koch, managing director at 490 Consulting. “While we've integrated various payment methods into corporate travel over the years, these solutions often solved one problem but introduced another,” he says. “However, advancements in blockchain technology are set to revolutionize how we handle transactions. This technology offers real-time payment processing and streamlined tracking, addressing longstanding inefficiencies in our systems.”
The expansion of payment distribution channels is rapidly changing how corporate customers book, pay and manage travel, explains Wendy Ward, chief marketing officer at travel payments network UATP.
“Modern payment platforms are advancing the support of new technologies, such as virtual cards that provide enhanced security, efficiency and flexibility, but at a cost,” Ward advises. “By enhancing connections between airlines, travel management companies and online travel agencies, payment platforms can support the many distribution channels used by corporate travel management,” she says.
For example, airlines, TMCs and OTAs can leverage modern payment platforms to enhance retailing and reduce cost through New Distribution Capability adoption, Ward says. “Relying on a payments platform with top-tier data, advanced reporting and data management enables real-time payments that enhance booking experiences, while minimizing risk and optimizing payment processes and costs,” she continues.
Ultimately, any “new world order” in business travel is really about enhancing productivity among travelers, travel buyers and the finance teams. Thane Jackson, SVP, global distribution strategy and supplier partnerships Europe at BCD Travel, observes that payments are one of the many areas “where we see airlines make individual and specific choices on what payment and settlement options are offered for NDC content. These require, in turn, airline-specific process alignments to enable support for those options,” Jackson notes, “NDC continues to require enhancements to existing systems and processes to enable comprehensive payment support for corporate travel programs and their travelers.”
Overcoming Legacy Systems
One big obstacle the industry is facing in optimizing payments and revolutionizing the end-to-end booking experience is a familiar one to many mature industries: Overhauling – or replacing – legacy systems. Doing so can be costly and potentially disruptive to operations, but is likely a necessary step to bring greater innovation to the business travel space.
To start, legacy systems lack compatibility with modern technologies, such as APIs, that make it possible to integrate digital payment methods that align with market demand, Ward explains. Legacy systems also often have fragmented data that makes it impossible to create optimized, omnichannel travel payment experiences that support corporate customers’ evolving needs.
“Outdated legacy systems can also create inefficiencies in booking, expense management, tracking and reporting,” Ward adds. “Legacy systems hinder the corporate travel industry by making it complex and cost-prohibitive to adopt advanced payment technologies that support increased transaction volume, additional users and new program features that boost revenues.”
The corporate travel industry is heavily reliant on many complicated, older systems, notes Charlie Sultan, president of Concur Travel at SAP Concur. These systems were largely constructed to facilitate the passing of a 16-digit credit number and have evolved over time to pass CVV and other details. “As 3DS standards, and other security protocols or regulations come online, these systems and all the downline systems need to be modified to account for these changes,” says Sultan, though he adds that many legacy systems “have been fairly efficient to date, as most payment alternatives that have developed over time still leverage this 16-digit field to simulate a credit card.”
When it comes to innovations in payments, virtual cards technology or tokenization is already being used with the digital wallet and will be an area of further innovation and deployment, according to Andy Nicholas, managing director and group business development head at payment consultancy PayTech Group. “While available through some issuers, to scale it will take time due to the costs associated with the development and local regulations,” Nonetheless, Nicholas says, “In years to come, single use/tokenization will replace the standard plastic through the digital wallet allowing for contactless payments replicating the consumer experience but with tokenization/single use card numbers.”
Sultan says the real benefit comes from being able to connect spend data across an organization as well as third-party apps like airlines and hotels. “This single view allows companies to unlock data and insights to help with more strategic decision making, increased agility, predictive budgeting, and the speed to stay ahead of the competition,” he says.
Navigate the Shifting Tides
All of these changing currents mean the role of corporate travel manager is becoming more complicated, and along with that, even more stressful. According to the most recent annual SAP Concur Global Business Travel Survey, nearly half (47 percent) of global travel managers say their role is more stressful now than 12 months ago.
Why is that? Among other things, two big reasons are the added responsibilities and the changing dynamics of the role. “They identify the top challenge as inflation driving up the cost of business travel. And they feel that one of the biggest threats to business travel is travel industry suppliers changing how they sell and book travel. It’s a push and pull between the two and travel managers are caught in the middle,” Sultan notes.
The job of the travel manager is more complex than ever, Sultan observes. “Their responsibilities span so much more than managing travel and expenses, and they’ve experienced layoffs and staffing shortages over the past few years, both within their own teams and with their travel management companies.”
The survey further reinforces the idea that we are in a transitional and potentially transformative time in the business travel industry and that travel managers will increasingly have more and more on their plate moving forward.
In this environment, the most effective decisions about payments solutions used in travel are those that have a collaborative approach between travel management, treasury and procurement, Nicholas says. “My advice would be, identify who within the organization is owning payments and build a collaborative team to drive the payment agenda relating to travel,” he adds. “Each business unit understanding the others’ objectives is critical to the success of the payment journey.”
With the rise of NDC, airlines are assuming responsibility for creating offers in real-time. As a result, travel consultants now work in a shopping-led workflow for NDC, rather than a schedule-led workflow, according to travel technology company Sabre, in a statement to Business Travel Executive.
“This change increases dependence on airlines’ tech stacks to operate robustly with the speeds travel agencies expect,” the Sabre statement continued. “NDC also introduces the concepts of offers and orders, rather than passenger name records (PNRs). Offers and orders are flexible technical containers that contain a wide array of content types. Over time, this will allow airlines to bundle multiple types of content together in innovative ways to make travel more enjoyable and efficient.”
To operate efficiently in this new landscape, corporate travel managers should look for technology that offers the most flexibility and visibility into data they need to optimize budgets and manage travel within policy, Ward says. These platforms have tools that automate tracking and reporting around travel bookings, enabling corporate travel managers to simplify expense management.
“They should also be able to bridge the gap between new and old,” Ward says. “Features such as real-time spend visibility across accounts streamline reconciliations, eliminate manual reimbursements, and optimize travel budgets and corporate policies. By relying on a single transaction portal with detailed spend data, corporate travel managers get faster insights into when, where and who is spending across corporate accounts, broken down by business unit, team or employee.”
