Amadeus Study: Travel Suppliers Look to Reap Benefits of V-Cards

The advantages of virtual payment cards for corporates and their travelers are well-documented. But virtual cards also offer some key benefits to suppliers, especially in light of business concerns stemming from the Covid-19 pandemic—and the supplier-side push is becoming an important driving force in virtual payment adoption, according to a new report from Amadeus. 

Conducted by research firm Coleman Parkes, the study canvassed 50 international air carriers, 50 major hotel chains and 50 travel agencies in February 2021. The survey illustrated the increased pressure such providers are facing to stay profitable amid the sharp downturn in travel stemming from the pandemic. Maintaining a profit was cited as the most pressing concern for 74 percent of agencies, 70 percent of airlines and 60 percent of hotel chains, according to the survey. Those figures were up significantly from the pre-pandemic era, when profitability was the top concern for about half of providers in each sector, Amadeus said.

In light of those concerns, suppliers are seeking ways to improve cashflow and increase operational efficiencies around payment acceptance, and the majority are banking largely on virtual cards to help accomplish those goals, according to the study. Sixty-eight percent of all suppliers expressed a belief that virtual cards equally benefit both travel buyers and suppliers. Airlines were particularly bullish, with 76 percent describing v-cards as mutually beneficial. 

As to specific benefits of virtual cards, each sector cited a different factor as the top advantage: for airlines, improved cash flow from v-cards’ shorter settlement cycles ranked first at 74 percent; hotel chains most often cited reduced costs and improved margins (64 percent); and travel agencies were particularly drawn to v-cards’ lower likelihood of settlement retention by acquirers (56 percent).

Respondents from across all segments also cited such security-related advantages as greater data protection and reduced loss from fraud—key benefits of virtual cards commonly touted by buyers as well.

However, while most suppliers are cognizant of the benefits of virtual cards, significant room remains for adoption, with only 60 percent of suppliers polled currently accepting virtual payments, the survey found. But those figures are likely to rise in the near term, with 90 percent of respondents believing v-cards will be an “essential payment method” in the future.

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