Mobile Payment Products to Debut
by Fred Gebhart /Mobile payment has yet to hit the U.S. business travel world, but several products are set to be rolled out in 2014.
Business travelers are already using their phones for airline check-in, travel bookings and other tasks that once needed paper or credit cards. And smart phones have already become payment devices in select markets across Asia and Europe.
“Mobile payment is clearly coming,” said Patrick Diemer, AirPlus International chairman and co-managing director.
“We just don’t know the details, like which technology will win out or if multiple technologies will exist for different markets or different uses. We will be issuing plastic for years, but at a steadily declining volume.”
Pilot projects
AirPlus isn’t ready to commit to any specific technology, Diemer told Travel Market Report. Instead, the company has launched two pilot projects—using two different technologies—for the business travel market.
One is a mobile wallet program with Deutsche Telekom in Germany called “My Wallet.” Corporate travelers download the app which can be used for purchases wherever MasterCard Pay Pass is accepted.
The app was launched on Android phones with plans to expand it to iPhone, BlackBerry and Windows devices.
My Wallet includes all negotiated corporate rates associated with the user’s account. There are no spending limits, but the pilot is restricted to T&E purchases from merchants who have the necessary technology, including near field communication (NFC) terminals, Diemer said.
A virtual card
The second pilot focuses on a mobile AIDA (AirPlus Integrated Data and Acceptance) virtual card solution similar to a physical lodge card.
Once used primarily to pay for lodging, a lodge card is a corporate travel card linked to a central payment account that is usually managed by a TMC. It provides direct payment to vendors.
The pilot program was rolled out earlier this year in the Benelux countries, Germany, Italy and Switzerland. Other markets will follow, Diemer said.
AirPlus’ virtual card is unique to every booking which makes fraud and abuse more difficult. Like My Wallet, the virtual card is powered by MasterCard.
Spending limits
Travel managers can set specific spending limits, transaction amounts and expiration dates. Managers can also allow or disallow Wi-Fi, breakfast, parking and other folio items in advance in order to reinforce policy compliance.
Companies can also activate custom data fields in each folio to help track and allocate expenses by employee, project number, cost center or other identifier.
On the hotel end, payment is guaranteed even if the traveler arrives late or fails to cancel a reservation. After each stay, payment is settled centrally through the company’s AirPlus account.
Richer data
“The advantage of the virtual card solution is that it can be launched by a company worldwide, not country by country,” Diemer said.
“The effect for the travel manager will be richer data than they can get with any other payment solution.”
AirPlus hopes to launch its mobile AIDA program in the U.S. in early 2014.
The Bank of Montreal is also considering launching mobile business travel payment in the U.S. in 2014, according to Kevin Kane, managing director and head of sales, Global Treasury Management, BMO Harris Bank.
It’s a safe bet that other banks, card companies and payment providers are moving in the same direction.
A payment evolution
“What we’re seeing is an evolution in payment,” Kane said. “Mobile payment is going to take over the business eventually because waving your phone by a terminal is so much easier for the customer than pulling out the right credit card or fishing for cash to pay for a cup of coffee at the airport.
“Consumers will push the change to mobile pay, especially business travelers who are already heavy technology users,” he added. “And once travel managers see the rich data they get from mobile pay, they will be pushing business travelers to convert to mobile.
“But it will be a long transition in the U.S., in part because there is such a huge base of merchants with older technology already installed.”
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