The role of B2B payment options in travel agency operations

Online travel agencies (OTAs) are complex. Between airlines, hotels, and other bookings, payments move between all types of stakeholders quickly and confusingly. The good news is that modern payment technology can help travel agencies simplify these multiplex systems to provide more control over payments and even help generate extra revenue.

Let’s explore the role of B2B payments in the travel industry by highlighting common challenges, identifying solutions, and discussing benefits.

Common payment challenges for travel agencies

The complex nature of travel agency payments, coupled with myriad external variables, makes it challenging to navigate. Managing, controlling, and securing payments in this sector requires future-proof solutions that streamline processes. But before discussing the benefits that B2B payment options bring to travel agencies and consumers, it’s important to understand the challenges that need to be navigated and solved:

Reconciliation/dispute management/resolution

Due to varying distribution channels and levels of technology integration, hotels and OTAs often disagree over contracted stay amounts. Ergo, hotels will frequently “force post” the amount they believe they are entitled to for a stay. This forces the OTA to dispute any reconciling amount, initiating a dispute and/or chargeback process. Managing this challenge takes effort and, over time, can eat away at the outstanding benefits of virtual card use.

Fraud

Fraudsters are becoming more adept. As payment practices change, bad actors adapt their strategies for obtaining valid card numbers through BIN attacks, AI, phishing tactics, social engineering, and more. This creates a need for robust B2B payment security, monitoring, and proactive partnership to mitigate the risk of fraud and its potential impact on OTAs and suppliers.

The benefits of virtual cards and B2B payment options for travel agencies

Many of the above challenges are the result of outdated account payable payment processes. Thankfully, WEX helps OTAs optimize travel payments to gain efficiencies, cut costs, generate revenue, and more. Here’s how:

Simplicity

With well-equipped B2B payment options, there’s no need to set up a traditional accounts payable (AP) process with every supplier. Instead, simply append a virtual card to a reservation, and the payment “rides the same rails”. This makes AP and credit much easier to manage.

Faster payment

Traditional invoicing methods are slow and clunky. With virtual payments, suppliers get guaranteed and immediate payment, which improves supplier relationships.

Direct communication

With the merchant model in place to take advantage of virtual payment solutions, suppliers can work directly with OTAs on billing issues, when otherwise they’d have to contact individual consumers directly. This effectively improves the customer experience for travelers, who no longer need to worry about managing their disputes.

More control

With WEX business payments, OTAs control the entire end-to-end client experience. If something goes wrong, the OTA can charge or refund suppliers’ customers directly, rather than having to coordinate with the airlines and hotels, which takes time.

Brand new revenue stream

The more suppliers accept virtual cards, the more rebates you earn, which creates a new revenue stream for your business.

More and better data collection

Virtual card payments add rich metadata to each transaction, following the payment from card creation through to posting and reconciliation. This allows OTAs to “auto-reconcile” most payments while gaining access to more valuable data throughout the process.

Payments are secure

With virtual cards, OTAs can create a single payment per reservation as well as enter a specified amount, merchant category, and date. Any deviation from these pre-set parameters will cause a decline, meaning the cards are nearly impossible to use for anything other than their intended purpose. And since single-use virtual cards are only valid for one use, they decrease an OTA’s vulnerability to fraud.

Cross-border benefits

All credit cards, regardless of issuing location, will typically work anywhere in the world. Local merchants can charge cards in their local currency, and credit card companies will convert the payment back to the currency of issuance. While convenient, this leads to hefty foreign exchange (FX) rates and other cross-border conversion expenses.

WEX virtual cards can be issued in 20+ currencies, allowing customers to be billed and make payments in those currencies, effectively avoiding FX and conversion expenses altogether. Furthermore, rich data inclusion on each transaction helps facilitate reconciliation, regardless of the billing and transaction currencies.

Simplifying OTA payments

WEX works with leading travel intermediaries to efficiently and securely pay travel suppliers anywhere in the world.

From accounts payable to supplier enablement and payment processing, WEX covers the full breadth of your payment processes to deliver streamlined workflows, automation, new revenue, reporting, and more.

Curious about what WEX can do for your business? Get started today.