Virtual card numbers (VCN) are a growing part of corporate finance, which more banks could profitably adopt as part of their corporate bank offerings, suggests Conferma.
The financial technology (fintech) company, a specialist in VCN, has issued a white paper outlining how banks can use VCN to access the addressable travel market – representing payments made by travel agents to hotels, airlines and other service providers-by offering the product to their corporate customers. The paper notes that Travelport, parent of the VCN provider eNett, estimates the total value of this market at US$810bn.
UK-based Conferma, which works with over 20 banks worldwide, has accompanied the white paper by identifying what it believes to be seven key reasons why VCNs are right for both banks and their corporate clients:
1. Transparency: Monitoring corporate spending is easier.
2. Security: The VCN can only be used for the purpose it was generated and for the amount assigned to it.
3. Ease of use: VCN purchases are automatically reconciled with cost centres.
4. Saves money: Reduces overheads for the customer.
5. Banks are part of the process: With every VCN transaction, banks stand to claim valuable interchange fees.
6. Moving away from legacy, and less profitable, payment methods: With the VCN, users have the profitability of the credit card without having to produce the physical card itself.
7. Customer satisfaction: A bank that offers VCNs “is a bank that is listening to its customers and delivering for them.”
“We have been a pioneer in this fast growing technology and so have a clear understanding of the benefits to banks and their customers,” said Simon Barker, founder and chief executive (CEO) of Conferma. “As we move further into the digital banking age, banks have to be able to react more swiftly and take advantage of digital technology to add value to customers.
“With our white paper, we have clearly and plainly laid out these benefits, showing banks what they have to gain by joining their competitors by offering this innovative and popular service.
“Barclaycard have told us that virtual payments are their fastest growing product set in commercial payments. The time is now right for the banking industry to start offering VCNs.”
SWIFT has announced that it has successfully completed the first phase of the global payments innovation (GPI) initiative pilot, clearing the way for the go-live of the service in early 2017.
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