As B2B keeps kicking its former reputation as being too sluggish to innovate, the area of corporate travel and expense management has emerged as one of B2B payments’ stars, demonstrating how much progress has been made.
The latest “Skift Corporate Travel Innovation Report” highlights two key ways the corporate T&E sector has adopted innovation: automated and virtual payments.
The report, released last week, collects analysis and commentary from top industry players about trends in the corporate travel industry. Highlighting a new white paper from Euromonitor, Skift’s report puts automation center stage in corporate travel today.
Euromonitor’s report agrees.
“Business travel is ripe for a shake-up, with low-cost carriers and short-term rentals already muscling in,” Euromonitor stated in its introduction of the white paper, “The Future of an Industry — AI to Z of Business Travel.” “Business travel has the potential to become highly automated because it is a more frequent activity, whereby brands can deliver and improve on the product and service thanks to big data and AI.”
Payments are key to this shift toward automation. Euromonitor identifies technologies like biometrics and voice-enabled AI that can bring personalization to the corporate travel space in a variety of ways, from the booking process to payment initiation and security. Chatbots are a particularly interesting trend, the report said. With B2C travel service providers like Booking.com and Expedia already using these solutions, corporate travel platforms are not only beginning to follow, but enhance the AI technology behind chatbots to support more complex, business travel-related tasks, like assuring travel suppliers are within corporate policy. According to Euromonitor, automation and AI are all about adding a personalized touch to the travel experience.
Skift’s latest report also focuses on analysis released last week by Buying Business Travel. In a post last Wednesday (May 10), the platform explores how payments innovation is pushing corporate travel toward automation and virtualization, even in the context of broader geopolitical shake-ups like Brexit.
According to Buying Business Travel, the virtual card account has been integral in promoting payments innovation in corporate T&E. Looking ahead, meshing payment technologies together is likely to continue promoting innovation.
“FinTech firms … are set to create more competition by offering these hybrid payment solutions to corporate clients,” the publication concluded.
According to Barclaycard Commercial Payments Product Director Maria Parpou, the bank is keeping an eye on this trend.
“This is something established players are looking into as well — indeed, at Barclaycard we recently updated our Precision Pay solution so that it offers debit, credit and prepaid payments on one platform,” she told the publication, which added that mobile-based T&E services — including mobile virtual payments — will continue to surface.
But ongoing market changes could lead to new disruption in the corporate travel payments space — and provide a gap that innovators may look to fill.
For instance, Buying Business Travel said that payment security rules under the EU’s PSD2 regulations could change the way corporates use commercial card products.
Caroline Haywood, AirPlus International’s U.K. managing director, told the publication that “PSD2 is going to lead a shift in the way corporate cards are used for online payments, as there are significant increased security requirements — an increase that is likely to make the payment experience less user-friendly but lead to a reduction in digital fraud rates.”
Similarly, interchange fee regulations are set to disrupt commercial cards.
“Corporates with a global card program may find this challenging, as legislation varies by geography,” said Barclycard’s Parpou.
Whether these shifts will force companies to turn to other payment technologies for their corporate travel needs, or turn to finserv and virtual card players for guidance on how to navigate these changes, is unclear. What is clear, though, is that changes are ahead for corporate travel payments.
According to Skift senior writer Andrew Sheivachman, automation and virtual payments are only the start.
“Automation is already a big part of how travel management companies operate and is set to disrupt other elements of business travel in the future,” he wrote. “As business travel continues to increase across the world, particularly in Asia, automated tools will only become more important to managing and controlling the experience of travelers.”
Payments innovation, analysts suggest, will play a key role in that automation path.