It’s likely that by now you will have heard the term ‘virtual cards’ bandied about but there seems to be a lot of confusion about what exactly these credit cards actually do. As they’re becoming more and more popular in the hotel industry it’s important to know exactly why some guests prefer them and how they are likely to impact your business. We’ve examined four of the main reasons why virtual cards are set to become the way of the future.
Safety and Security
The difference between a virtual credit card and a regular credit card is that the virtual one only works online. A virtual card can only be charged for a limited time and for a limited amount. It’s not a physical card that can be stolen or lost, and it’s not linked to a regular credit card, so the chances of being a victim of credit card fraud are extremely unlikely.
The guest will make the booking and pay through the channel as normal. However, when the hotel payment settings include the use of virtual cards, the channel will not send the hotel the guest’s credit card details. Instead they will create a virtual credit card so that a guest can feel completely safe about their payment.
Our feature “Sirvoy Vault” makes it possible to save the virtual credit card details which will be stored in a safe and secure way. This is also very helpful if you use Stripe as your payment solution because not every OTA’s virtual card is automatically saved by Stripe, but it can be with this Sirvoy feature. Sirvoy’s integration with Stripe can be used to later charge virtual cards.
…if your hotel is targeting business travelers, accepting virtual cards is a must!
Easier for business travelers
Virtual cards are easy and safe for companies, as they allow them to prepay rooms for employees without having to hand out business credit cards, and the traveler doesn’t have to worry about having to use their own personal card.
This negates the need for physical plastic cards and is appreciated by many businesses for the ease of use. So if your hotel is targeting business travelers, accepting virtual cards is a must!
It’s not that difficult
That is of course, if you’re doing it right. When a booking is prepaid through a channel, they will send you a virtual card. The amount of money this virtual card holds is usually the price plus tax of the room. It will look like a regular credit card and it will be stored like a regular credit card if you have a PMS that can handle it.
An issue many hoteliers have encountered is incidental costs at the checkout. You can’t add the additional charges directly to the virtual card number since the amount of money is predetermined and the transaction would be declined. When a situation like this crops up, the best solution is just to charge the guests’ own personal card.
The way of the future
Safety and ease of use for both hotel and guest are something that the hospitality industry aims for, so it’s only natural that virtual cards are the way of the future.
Booking channels like Booking.com, Expedia and Agoda are already using them, and because of this, guests can feel completely safe when making a booking.
This interesting article by Klarna, proves that statistically, most millennials don’t even use credit cards. A mere one out of three owned a plastic card. And the ones that did use a physical card preferred prepaid options when making a purchase online. Does that mean that even credit cards could soon become outdated?
It is really important that hotels are up to date when it comes to the safety of payments, and virtual cards are the safest option for both the hotel and the guest. All things considered, we can definitely say that this is one trend that’s here to stay!
Update: Virtual cards are still evolving and some of our partners are experiencing issues with the adoption of this new technology. For example an ongoing problem with virtual card details sent from Expedia means that they can’t currently be charged. You can find more information in this support article.