Virtual card technology these days is making headlines around the payment sector, but Christopherson Business Travel has been using it for years. To help a client solve a unique challenge, the Salt Lake City-based travel management company developed the virtual HotelPrepaidLogic card, bringing automation to what had been a tedious, manual process.
CBT in 2009 secured trademark and patent approval for HotelPrepaidLogic, and in 2011 used it for longtime client CHG Healthcare Services, a medical staffing company.
"There were several problems," said CBT CEO Mike Cameron. "CHG didn't want travelers to use their personal credit card for hotel stays, as sometimes the stays were two to four weeks, which is expensive, and most [travelers] didn't have the credit to pay on their personal credit card. So we had to find a solution to pay."
CHG functions as a sort of temp agency of physicians who fill spots in short-staffed hospitals across the country. Stints can last from one week to several months. "A hospital will lose revenue if it doesn't have a surgeon who [for example] goes on maternity leave, but it can't [permanently] fill the position, so it brings in someone for three months," explained CHG director of travel KayLynne Reece.
Dependent on hospital needs, the number of CHG-hired doctors varies from year to year. In 2013, the company booked 27,000 hotel reservations totaling 167,000 room nights, according to Reece. CHG's travel department under Reece consists of 18 booking agents, two managers and two supervisors. Arranging lodging, flights and car rentals for medical workers, the department is split between Utah (15 employees) and Florida (eight employees). Travelers are responsible for their meals.
Before HotelPrepaidLogic, CHG classified doctors by groups or teams__emergency medical doctors, for example__and issued different American Express cards for each group. "Every time we had a doctor on the [emergency medical] team, we'd put his hotel on that card," Reece explained. A travel agent then would fax to the hotel a copy of that credit card, but sometimes the fax would get lost before the traveler arrived. In exposing such credit card information, the staffing company also risked fraud.
After each trip, the CHG travel team compared travel itineraries to hotel folios to match the charges of the Amex bill to the traveler. The hotel folio then would be coded for each assignment by identifying the doctor and hospital work site. It was a "very manual" and time-consuming process, according to Reece.
"They didn't know who was staying in which hotels and would have to reconcile it," Cameron explained. "So they asked us to solve it."
CBT began developing the software in 2009 while working closely with CHG's IT and accounting departments, as well as payment solutions company Wex (formerly Wright Express), to customize HotelPrepaidLogic to meet CHG's particular needs, explained Cameron and Reece. Beta testing continued until the full-rollout of the product in 2011. "We'd tell them exactly what we needed and [CBT] built it," Reece said.
Wex provides the technology to create the one-time-use cards backed by MasterCard. CBT built the technology that allows CHG agents to reserve a hotel, request virtual cards from Wex by sending the reservation and create a digital copy of the front and back of the one-time-use card to be faxed to the hotel. Cameron explained that CBT also created the ability to fax the digital card at a pre-selected date. AirPlus also issues Wex cards through HotelPrepaidLogic.
To implement the service, organizations first need to secure credit approval. Alternatively, clients can use HotelPrepaidLogic Lite, which uses a company's existing central credit card but digitizes and automates the process of faxing the front and back of a card. "You can do the old version, but instead of filling out the form, making photocopies and faxing, our agents can send faxes digitally from the GDS," Cameron said.
HotelPrepaidLogic integrates with global distribution systems Apollo, Sabre and Travelport's Worldspan. (The latter of which is what accommodates CHG's bookings.) A travel agent now can insert a traveler's name and billing code when creating a one-time-use virtual card for the exact amount of a stay. The agent also includes extra for hotel taxes and some incidentals, explained Reece.
"All that manual coding goes right through with the charge," Reece said. "Now what was once a manual process becomes an electronic process."
HotelPrepaidLogic on the day a hotel is booked digitally faxes a copy of the one-time-use card to the hotel to hold the reservation, and then sends it again on the check-in day. "The fax is ready and available for when [the traveler] checks in, showing the credit card and authorization from the company," Reece said.
The technology can email a copy of the card, but that requires sending it to a particular email address, which can be tricky if there is no central email account, Cameron explained. It's still more practical for hotels to have a main fax machine that all clerks can access at any given time, he said.
Although the card is a single-use card to be used for a single stay, it can be swiped multiple times. Reece explained that some hotels swipe cards each night, or when a traveler checks in and then again when he or she checks out. The card expires a few days after the traveler checks out, providing the hotel time to process the transaction.
About 65 percent to 70 percent of CHG's transactions now are automated, according to Reece. "It helped with an enormous amount of manual hours and became such a seamless process," she said.
In addition to improving the reconciliation process, Reece said HotelPrepaidLogic cut card fraud by up to 80 percent. "We didn't have a lot of fraud, but we did have a lot of open cards with unlimited value which we were exposed to, so our exposure is less," Reece claimed.
The nature of CHG's business__filling hospital spots around the country based on need__means it is difficult for the firm to predict hotel spend, thereby making it difficult to negotiate discounts. However, Reece said that since implementing HotelPrepaidLogic hotels have taken notice. "They're seeing our credit card authorizations more and they're calling us a bit more," she said.
Other Virtual Solutions, For Real
Other card issuers and networks offer similar virtual card solutions. AirPlus in 2006 and JPMorgan Chase in 2007 began offering the ability to produce cardless, one-time-use 16 digit numbers.
U.K.-based Conferma developed technology to create virtual cards and in 2008 partnered with Barclays Bank to offer the product to its first client, multinational TMC ATPI. American Express, AirPlus, HSBC, U.S. Bank and Wex each subsequently have joined Conferma's network. GDSs Sabre, Amadeus and Abacus, and travel technology provider KDS also have integrated with Conferma, and MasterCard and Visa Europe have signed distribution agreements with the company.
MasterCard in 2009 began providing clients the option to generate single-use account numbers through its inControl suite, after it acquired Ireland-based payment company Orbiscom. MasterCard in October 2013 announced it began piloting its own virtual card number technology and planned a full global release for early 2014.
UATP since 2009 has offered a single-use 16-digit virtual card through a partnership with eNett International. For its part, eNett (majority-owned by Travelport) has been reporting solid growth and plans to enter more markets. Utility for the corporate travel market improved last year when Travelport embedded eNett as a form of payment within the Smartpoint agency desktop application.
Outsourcing customer service and technical support company Sykes Enterprises began using U.S. Bank's Travel Virtual Pay solution in July 2013.