The optimal payment mix for corporate travel

In today’s dynamic business landscape, corporate travel programmes are becoming increasingly complex, that is why retaining simplicity in travel has always been part of our ethos at Rennies BCD Travel. As travel managers strive to balance cost-effectiveness with employee satisfaction, the choice of payment methods can significantly impact the financial health of your programme.

A well-optimised payment mix can streamline processes, improve cash flow, and reduce administrative burdens. By carefully considering the various payment options available, you can unlock the full potential of your travel programme. The cost associated with corporate travel management is about 10% of a company’s annual budget, so it’s no surprise that managing travel payment and expenses remains a top priority for travel managers.

Gone are the days of traditional payments like EFTs and corporate credit cards. Today’s forward-thinking organisations must craft a payment mix which balances financial control with operational efficiency and employee convenience using the various innovative payment methods emerging.

Key Drivers of Travel Payment Evolution

Organisations are continually looking for payment methods that are secure and provide detailed insights into travel-related spending. Two key factors that have impacted the payment evolution are:

• Advanced financial technologies that allow for seamless integration between travel booking platforms, expense fand payment solutions. This interconnectedness enables more visibility over corporate travel spending.
• New working models and the prevalence of flexible work arrangements requires more adaptable payment solutions that can accommodate diverse travel scenarios.?

Recommended Payment Mix for 2025

To help travel managers choose the ideal payment mix, here is an overview of available options:?

1. Bill-back credit facility

In some markets payments are still facilitated via a 30-day credit facility which is payable via EFT. In this instance bill-backs are facilitated but this is a cumbersome and costly option, and most travel companies prefer credit card payment as an alternative.?

1. Credit Card Payments:

• Corporate (Lodged) credit cards – Corporate credit cards remain the most popular payment choice. Companies prefer this option because they have control of expenses and can earn rebates on their overall travel spend. Technology enhancements also enable real-time expense categorisation of expenses. Corporate Lodged provide a secure form of payment, reducing the risk of fraud.

• Individual corporate cards – Individual corporate cards are popular as travellers enjoy the flexibility of this option, but the downside of this is that expenses can’t be allocated until the employee has submitted an expense report and businesses can run the risk of out-of-policy spend.

• Virtual cards – A significant evolution on credit card payment is Virtual Card Technology. A virtual card is an electronically managed payment option that covers a single transaction. It is easy to identify and track (is, therefore, more secure), and its automated nature enables instant payment, more comprehensive, efficient and speedy reconciliation – with a 100% transaction data match. As there is no need to wait for bill-back documentation, the payment will be reflected on your cost centre quickly, giving you more control over your budgets. The downside of virtual cards is that as they are a fairly new concept, so suppliers need to train front desk staff how to accept it.

• Personal credit cards – This is the least popular card payment method as it requires the individual to pay for business travel on their personal card and claim back the expense. This often puts a strain on the individual.

1. Digital Wallets and Mobile Payment Solutions

Digital wallet transactions are revolutionising how consumers make purchases and are set to become integral to future travel payment. These electronic payments automate transactions, enabling travellers to make payments directly from their devices, such as smartphones, tablets, or computers, without needing physical cash or cards.

• Card-based digital wallets – these don’t hold a balance or directly handle funds. The user is provided with an encrypted token and are popular options for international travel transactions in countries with developed banking systems. They reduce foreign exchange transaction fees and provide real-time currency conversion.

• Story-based digital wallets – these act as intermediaries with merchants, withdrawing money from the card and settling the transaction with the merchant. The most popular example is PayPal.

1. Prepaid Travel Expense Accounts

Prepaid solutions offer granular spending control, allowing organisations to pre-purchase bundles and precisely allocate funds for specific travel requirements. This provides clear spend boundaries and limits financial exposure. This is however a manual option and does require additional monitoring and reconciliation.

Ultimately the optimal corporate travel payment strategy is not about selecting a single solution but creating a dynamic, integrated approach. By adopting a multi-faceted approach to payment and continuously adjusting the payment mix to match evolving payment technologies and business needs, you will transform your travel expense management to your advantage.