eNett VANs leading innovation in B2B travel payments

The past year has seen big changes in how Australian travel agents are regulated, driven in many ways by the changing landscape of the travel business in general. New online business models, technology and global competition have all had an impact; some travel companies have been quick to embrace these challenges while others are still playing catch up.

The transition from the Australian Travel Compensation Fund (TCF) to the voluntary Agents Travel Accreditation Scheme (ATAS) is a positive move yet in practice has had little real impact to date.  However the change is spurring agents to look at ways to safeguard their business and clients’ funds. Top of mind are what protective measures are available to mitigate the risks of supplier default and fraud.

The way travel agents and suppliers pay and get paid has fallen behind other travel industry innovations says Anthony Hynes, CEO of eNett International, a global payment solutions provider for the travel industry.

 "There hasn’t been a great deal of innovation in the B2B space. It is still a process of bank transfers and a lack of transparency of cross border money flows. There is a lot of inefficiency," Hynes said.

"In contrast there is continual innovation in the consumer market and post-deregulation, we see similar opportunities for modernizing and streamlining B2B payments in the travel space."

These opportunities are focused on eNett’s Virtual Account Number (VAN) payment solutions. A VAN is an automatically generated unique 16-digit MasterCard number that can be used to make supplier payments, minimising the risk of fraud and supplier default and can be used wherever a supplier accepts MasterCard online. An added incentive for agents is the reward of rebates on each VAN transaction.

Much of the current inefficiency in the Australian travel industry, Hynes says, stems from time wasted with manual payments handling and reconciliation. VAN automates this procedure, vastly reducing costs and adding an extra layer of protection by enabling pre-defined spending limits, payment dates or other set parameters. The company estimates manual payments handling and reconciliation cost the travel industry as much as US$1.5 billion each year.

The company is the product of a joint venture with Travelport which enables full integration with the GDS, so suppliers can be paid directly from within the booking flow.

"It does away with the need to navigate from the GDS to another system to make a payment," said Hynes.  

No longer constrained by TCF policy, Hynes says agents are seeking more flexible and cost effective options to handle the payment process, of which foreign exchange transactions in multiple currencies are an integral part in today’s global economy.

"The trend of agents using their own card to pay suppliers is falling away. There is a more open view of payments today and we have probably the most efficient Forex options in the market. In addition, unlike many competitors we have that understanding of how the travel industry really works."