What is a Virtual Credit Card Number?

Imagine this: There’s a contractor who’s traveling for company business. Because they do not have a corporate charge card, the hotel will be paid for using some executive’s corporate credit card number — the same credit card information that always gets passed around in this kind of circumstance.

The assistant making the booking relays the exec’s card information to a travel counselor at the travel management company, who then reaches out to the hotel to request a “card not present” authorization form, giving the hotel legal authority to charge the card even though the physical credit card will not be physically presented. A daytime employee at the hotel sends the form on to the travel counselor, who then fills it out with the credit card information and faxes it back to the hotel. By this time, the hotel employee has gone for the day. When they return, the form has disappeared and card details are lost, buried under a pile of paperwork, and it has to be faxed again.

During the hotel stay, the contractor, who doesn’t know the company’s travel policy, goes to town, ordering room service and helping themselves to the minibar because “hey, why not? The company is paying.” Of course, the final bill is way over budget.

Post-trip, the finance team receives a credit card statement from the bank for the exec who’s always lending out their card and sees multiple hotel stays without any traveler details. They notice some irregularities and realize the card number had been misused. They then must go through the aggravation of issuing the executive a new card and settling the fraud case with the bank.

Now let’s reimagine the same scenario but if the company instead had requested a virtual card number from a corporate travel program by American Express Global Business Travel (GBT) — which is available to GBT clients through the Virtual Payment Expert (VPE) solution and powered by Conferma Pay, a leading provider of virtual card and digital wallet technology.

In this case, the assistant making the booking simply informs the GBT travel counselor that a virtual card number VCN, not a corporate or physical credit card, will be used for payment. GBT makes the request to Conferma Pay, which issues the virtual credit card number in a matter of seconds. That number then seamlessly gets entered into the reservation that is sent to the hotel. Conferma Pay also handles the “card not present” authorization form through its secure email delivery system, making the form easier to send, track and receive. Because the VCN has a spending dollar limit that the company or issuer sets, the contractor cannot get away with racking up an enormous bill during their stay.

Benefits of Virtual Credit Cards Numbers

When the card statement comes in, the finance team can easily identify who on the account was responsible for the hotel charges because the VCN carries pertinent itinerary and traveler profile data that can be linked back to an employee, job title, or department. This makes it simpler to reconcile statements line item for line item and back to a specific employee’s account.

There is little chance of fraud as well. Because the numbers issued by VPE are only valid for a specific time window and can be set to make payments only to hospitality vendors (e.g., air, hotel and car suppliers), it will be difficult for a fraudster to abuse the virtual card. And even if they do have a rare opportunity, because of the virtual payments spending cap, the damage won’t be nearly as much.

With all of the great fraud controls and ease with the booking and reconciliation processes, it’s no wonder why the number of corporate travel cardholders using VPE doubled in 2018, according to Shawna Boyce, senior product manager of VPE. She expects that number to climb significantly since the technology is getting rolled out in more countries this year.

While VPE is mainly used for hotel transactions, Boyce says more clients are asking about it in regard to air, car and rail travel as well. And although VCNs generally are reserved for travelers with looser connections to the company, such as new recruits, contractors, guest speakers and overnight drivers, Boyce says some clients now are requesting them for their steady business travelers, too.

“Some companies are looking to just replace their entire corporate card capability with virtual cards, and we do have a couple of companies today that use them exclusively for every single one of their travelers,” she says, noting that one of the benefits of doing so is that all charges appear on the one statement.

Implementing Virtual Credit to your Travel Program

During implementation of VPE, the company will determine a spending cap for the virtual card, like you do with a prepaid card. Boyce always recommends a tolerance level of at least 40 percent over the total base room and tax amount. This way, any additional taxes that were not noted in the original rate and incidentals are covered and the VCN won’t get declined during checkout. On top of the tolerance, some clients also add a per diem if they plan to pay for certain amenities, such as Wi-Fi and parking that may require an additional online purchase or charge to the virtual account.

“It’s all up to the client as to what they want to allow their travelers to be able to charge on the card,” Boyce says.

During implementation, the client also will set the VCN’s activation period. Boyce recommends having VCNs expire between seven and thirty days post-checkout, which is enough time to allow hotels to close out their folios but also can help contain the risk of unauthorized charges or an over-the-budget transaction.

Virtual card technology is quickly expanding into more areas of corporate travel as well as the corporate expense process as the concept of the digital wallet becomes more widespread. Our virtual payment experts can help you learn more about VPE and how it can help to optimize your travel program.