BMO Financial Group (BMO), the Canada-based financial services provider, recently announced a new partnership with Conferma, a global fintech company specializing in virtual payments across all B2B sectors. Last week, the Ardent Partners ePayables research team sat down with Steve Pedersen, Head of North American Corporate Credit Card Products at BMO, to discuss the new partnership and BMO’s plans moving forward.
Virtual Cards Background
Commercial credit cards, as we all know are a long established part of the business world. There are fleet cards, purchasing cards, travel cards, ONE cards, meetings cards, ghost cards, and even project cards. One type of commercial card that’s becoming more and more common is the virtual card. A virtual credit card is a randomly-generated, temporary credit card number that can be used once when buying online for goods or services. In some cases, the virtual card number can also be linked to a maximum charge amount designated by a business or cardholder, in the case of personal use.
At its core, a virtual payment card is a method of masking the true information of a charge account. In this way, you can use the virtual card either with an established commercial credit card program or on its own, simply attached to a charge account. Unlike purchasing cards, which are perhaps the closest relative, virtual cards—sometimes called “controlled payment numbers”—are useful in many areas and are becoming increasingly popular for travel-related purchases.
The BMO-Conferma Partnership
BMO has been using virtual cards for some time within its Payables solution. Pedersen mentioned that paper is cumbersome and time-consuming for travelers and accounts payable (“AP”) teams to process and manage. He talked about some of the benefits of v-cards being that they capture all the information companies need to reconcile before transactions occur, and that they also provide great control features that help with usage. Virtual cards are only good up to a certain dollar amount that is set by the enterprise. While virtual cards offer numerous benefits to buying organizations like increased security, reduced exceptions, decreased fraud, and better transaction detail, they do still present a bit of a challenge within the business travel space. For business travelers, a question has always been “how do you get the virtual card number to merchants?” For instance, sending a fax was the most efficient way to pay with v-cards at hotels. BMO sought to solve these issues through its partnership with Conferma.
Conferma, founded in 2005, has roots that began within the travel sector, plugging the gap of corporate hotel booking technology to enable higher adoption of virtual cards. Today, the company has integrated its virtual payment solutions with more than 70 online booking tools, 400 travel management companies and all the major hotel chains in North America. The company has built an automated way to deliver card numbers to hotels so that they will recognize payment as a v-card which has significantly increased acceptance. By working with Conferma, BMO is providing an enhanced virtual card solution for its corporate card clients in both Canada and the United States. The new, joint solution is backed by Conferma’s ecosystem of travel management providers and partners, and will provide BMO’s North American clients with a more secure and cost-effective way to manage business travel. This new offering enables simplified digital payments by the creation of a single-use virtual card number that can be used within booking platforms to pay travel suppliers.
The solution is designed to keep account information safe. A unique token is tied to one travel reservation with set parameters on what can be charged. This token with the associated spend information is automatically correlated with the corresponding supplier payment, which greatly helps simplify the reconciliation process.
Conclusion
BMO is the first of the five major banks in Canada to partner and provide a solution like this for business travel. For corporate customers of BMO, the new Conferma-powered v-card will provide embedded security, help minimize fraud, and greatly alleviate the problems of v-card acceptance at hotels. This solution will help to cut down on manual reconciliations by providing better payment data, such as invoice number and line-item detail as to what was bought when and by whom, in addition to basic payment amount information. According to Pedersen, the new solution has been well received by their customers who appreciate the improved, easier corporate travel payment experience.
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