PrivesanNaidoo_100.jpgThe frequent use of 30-day accounts by South Africa’s public and private sectors could soon come to an end, with new solutions providing corporate and government entities with a much-improved alternative.

Although 30-day accounts are still widely used by the travel industry, these accounts are an unnecessary burden on Travel Management Companies (TMCs) whom are left to forward-fund clients’ travel requirements. This creates cashflow challenges for TMCs.

A panel discussion at the recent Global Business Travel Association Conference has helped to identify many alternatives to the 30-day account, including lodge cards, prepaid cards and single-use virtual cards.

Privesan Naidoo, Head of Nedbank Corporate Card Issuing and American Express Merchants (providing cards and payment solutions for travel, entertainment and procurement) unpacks some of the alternatives in this month’s SmartProcurement.

Virtual cards, in particular, were proposed as a viable solution that would not only alleviate the financial burden TMCs face, but also increase fraud protection and client security. Virtual cards are linked to clients’ credit cards at issuing banks, which means TMCs are spared from carrying the credit risk on behalf of clients. Virtual cards also integrate comprehensive security parameters, which would help the TMC and corporate entity to limit fraud.

Companies can specify aspects, such as to whom the card will be issued, the value of the card, the authorised merchants and for how long the card will be valid. Thanks to the transparency of these specifications and the clarity of spend offered by the virtual card, reconciliation becomes more streamlined too.

However, there are still some hurdles holding back the adoption of virtual cards in the South African market. TMCs have been slow to adapt, as they are reluctant to invest in having these cards integrated with their systems. However, demand for these cards has steadily risen, and any lingering resistance is expected to be short-lived. Merchants take on the risk of any chargeback by manually entering the card details on the terminal, and many banks have disabled this functionality due to fraud.

American Express is currently launching a holistic solution that integrates virtual cards and other card solutions and will allow clients to customise how they book travel. Named the Complete Travel Solution, it is a one-stop shop for both companies and TMCs.

It integrates virtual payment options as well as Billthru, a pioneering bill-back solution designed to improve cashflow and spend visibility. Various partnerships with Uber4Business, iVeri and Integrated Commerce Solutions (ICS) will also be available, as well as tailormade travel insurance solutions.

With these different aspects managed under one umbrella, reconciliation will become far more straightforward. BTAPowerlink will automatically reconcile transactions with same-day viewing of the matched invoice and statement data and assist with Payment Card Industry compliance. Soon, every line item on a client statement will include a downloadable invoice, enabling the corporate and TMC to match the reconciliation of each line item easily, as well as to run any crosschecks for travel expenditure.

American Express will assist the TMC and the client with the entire process, from the time the card is issued right through to the reconciliation process. This will simplify the administrative task of TMCs significantly, freeing them to focus on what they do best – offering their clients the best possible travel advice and service.

A lot of solutions have been taken to market. However, a key differentiator that sets the American Express Complete Travel Solution apart is the dedicated service model, which offers each client a centralised service desk and dedicated account manager to help them through the onboarding process and with each step of managing their solution.