In this short article, we are going to analyse the pros and cons of “virtual cards”, that have been issued by the major multinational travel portals for accommodation owners, replacing the real credit cards of travelers.
These new payment method, commonly referred to as “virtual cards”, keeps the format of real credit cards, but in general they may prove to be a new way to let multinational travel portals have more control over the entire money flow. Let's look in detail for what reasons:
- they are disposable cards, with a previously set amount that is usually difficult to dispute;
- they can only be used upon the guests’ check-out;
- they expire shortly after the check-out, so hosts need to charge them quickly;
- in order to charge the guest for any ancillary fees, it is still necessary to ask for his real credit card, with the risk of creating further confusion;
- accommodation owners must still pay attention to the management of cancellations, refunds and no-shows, so everything is still manually managed and with the use of POS;
- after all, hosts are always tied to the use of POS, while, given the "innovation", travel portals could have made more efforts to find a better performing payments collection method.
On the other hand, "virtual cards", presented with the intent of protecting travelers' payment data, could, however, have a negative turn for the accommodation owners.
Despite the great security advantage, as we have seen, however, the accommodation owners have to require the guests' real credit card for all the ancillary charges, i.e. those not related to the room price. It is the travel portals themselves who advise, or even require, the owners to do so.
But the protection that is guaranteed with the "virtual cards", suddenly evaporates. How is it possible? Very simple: the transfer of the real credit card takes place outside of the multinational travel portal, so the latter would be completely considered exonerated by any liability... Et voilà!
How are "virtual cards" presented? As a method to protect the guests payment data.
What could actually "virtual cards" be? A method to centralize the money flows management into the hands of multinational travel portals + a method to protect multinational travel portals' systems.
And you? What do you think about virtual cards? If you are a host, how are you managing this change?