The BIG Rethink: Let's shape the future of our industry
Driven by changing consumer behaviour and accelerated by the pandemic, the world of corporate payments is evolving further and faster than anyone predicted.
That’s why we’re having a BIG Rethink – a fresh, smart, and modern approach that truly speaks to the needs of our customers in their new reality and beyond.
And we’re not hanging around.
We’ve already kickstarted the movement in style with an industry-leading webinar featuring Brooke DiNatale (European Head of Commercial Solutions, Mastercard) and our own Paul Spelman (Managing Director, AirPlus UK and Ireland).
They put their heads together to discuss the challenges – and solutions – the industry must consider to stay relevant in these changing times.
In this article we’re going to take you through what was covered in the webinar, focusing on the new way of thinking that needs to lead us into the new year.
What exactly are our customers' needs? And how can we meet them?
Let’s take a look.
Post-pandemic trends: how have corporate payments changed?
The commercial payment space is transforming. What are the trends that we’re seeing going into 2023?
1. Consumer behaviour is driving corporate experience
We’re all consumers and travellers. And as consumers, we shop, bank, and order on mobiles, with 25.7% of people worldwide using mobile payments *1 – and we want smooth, easy, and intuitive service with it. Now, there’s an expectation for corporate payments to measure up.
So our need to focus on mobility is essential, as is aligning our products with the consumer experience – making sure we’re up to speed.
2. Virtual cards are on the up
The desire for virtual card usage is growing; they’re secure, easy to use, and offer greater control. In fact, the global virtual cards market size is expected to reach 60.06 billion by 2030 *2.
There’s a growing demand for reduced process complexity, and virtual cards have become the perfect tool for the job. For example, look at booking flights and hotels. Remote working made managing all those individual payments more complex. Virtual cards eliminate those issues and because of this, customers are now looking for ways to incorporate virtual cards into their everyday spend.
3. Payment integrations
Integration is key: turning procurement systems into procure-to-pay where possible. By integrating virtual cards with existing solutions, it gives companies the control, security, and transparency they really need. In fact, according to Coupa, pre-approval of PO-backed virtual cards reduced daily transactions by 80% *3.With virtual cards, travel managers will have greater control over employees’ travel plans, while allowing them to make their own bookings, as the trend shifts from a single travel department to a self-booking model.
4. ESG (Environmental, social and governance)
ESG is the buzzword of the corporate world (and with good reason).
It’s a crucial set of standards that look at measuring a business’s impact on society, the environment and how transparent and accountable it is.
By looking at environmental, social and governance opportunities, we can improve our relationship with the world, making smarter decisions.
5. Data analysis and AI
We live in the age of data, with data capture and analysis essential for company growth.
But the next step is anticipation.
How do we use AI and machine learning to anticipate the future? The potential is huge. Avoiding manual work, we could drive efficiency and economic benefit.
What are the major obstacles we face?
Of course, there are challenges ahead. Such as:
Giving a consumer experience
The freedom that comes with a consumer card doesn’t translate easily to the corporate experience.
As a consumer you can pay with your phone, or even your watch – while this is possible with some corporate cards, including those from AirPlus, it’s by no means the industry standard at this point.
We need to look at how we give people the same experience on the consumer side.
Overcoming integration challenges
Integrating virtual cards into current systems is vital for growth. But it’s not always going to be easy – varying adoption rates and traditional systems can still present integration challenges. Turning up at a hotel check-in desk with a virtual card could potentially cause a whole host of issues, for example, but this is increasingly becoming a thing of the past as digital wallets and their ability to provide contactless pay are bridging the gap between physical and virtual cards.
What role do Virtual Cards play in the future?
We believe virtual cards are the future of corporate payments.
- They fill a gap. With only a small number of employees authorised to use a corporate card, virtual cards can take up a natural place.
- They reduce the risk of fraud.
- They save time and money and limit extensive expense reporting.
- Better analysis with a crystal-clear view of financial reporting data.
The physical corporate card: gone for good?
The answer is no. At least, not yet.
But what we will see is the continuing rise of the virtual card and the decline of physical card use.
Mastercard predicted that a majority shift to digital payments would take five years, and, accelerated by the pandemic, it only took two – so it makes universal use of virtual cards easier to envisage.
The thing is, the way that consumer behaviour is driving corporate behaviour changes across markets. This is down to customers having a mixed payment experience – cash, virtual card, physical card.
This won’t change anytime soon – but the percentage shift towards virtual cards will continue to grow.
Bleisure: what’s it all about?
Business and leisure travel is becoming more blurred, a growing trend that entwines itself with the future of corporate payments. According to Trip Actions report 2022 *4, 35% of travel bookings now include a weekend stay.
People have been at home for two years. When they travel for work, they want to combine it with some personal travel on top of it, cutting multiple travel times and reducing environmental impact.
Bleisure business is estimated to reach 497 billion by the end of the year *5, so it’s something we have to adapt to.
Sustainability is key
Going green: it’s a global topic of our time.
Thinking sustainably is fast becoming a necessity – and we have to act responsibly, both professionally and personally.
So how do we do this as a business?
Make the most of our trips
We all have a duty to get the most value out of the trips we’re taking. This means not taking a long flight just for one meeting. Let’s look at taking longer visits, fitting in a team meeting or a workshop to ensure we’re getting the most value.
Include rail in the travel mix
Considering rail as an alternative or complementary travel choice can help us all be more sustainable. It’s about making smart choices – looking at where rail can provide an ongoing connection, for example, or be used for a shorter trip.
Analyse the effect of our behaviour
How is our behaviour really affecting the environment?
The fact is, we need to do more than just go paperless or use recycled card plastic. Let’s start by using carbon tracking and analysis tools. Then we can look at the real effects that each flight has – and then do something about it.
Consumer and corporate behaviour: how quickly will they merge?
It’s already happening.
We’re seeing more digital wallets, contactless, virtual cards – and it’s only going to increase. Then we’ll start seeing the use of virtual cards in procurement and the integration to systems.
- Consumer behaviour is driving corporate experience.
- Sustainability is becoming a much higher priority than before.
- Mobility is key to matching consumer needs.
- We have to ensure the integration of payments with existing systems.
Want to know more? Get in touch! And stay tuned for our upcoming podcast series, all designed around the BIG Rethink.
1 https://moneytransfers.com/news/content/mobile-payment-statistics, 22 Mobile Payment Statistics Detailing the Industry’s Growth, Money Transfers.
2 https://www.globenewswire.com/en/news-release/2022/09/19/2518351/28124/en/Insights-on-the-Virtual-Cards-Global-Market-to-2030-Increasing-Demand-for-Digital-Transactions-is-Driving-Growth.html, Insights on the Global Cards Virtual Market to 2030, Globe News Wire
3 https://www.coupa.com/blog/finance-ap/how-virtual-cards-for-b2b-payments-improve-cash-flow-capture-efficiencies-and, How Virtual Cards for B2B Payments Improve Cash Flow, Coupa
4 https://tripactions.com/blog/tripactions-fall-business-travel-preview-2022, TripActions Fall 2022 Business Travel Preview, Trip Actions
5 https://www.futuremarketinsights.com/reports/bleisure-tourism-market , Bleisure Tourism Market Outlook 2022-2023, Future Market Insights.