PayParc On Travel Sector B2B Payments Tech
The travel industry has a long and arduous road ahead, and it’s unclear what the industry will look like as it goes through a painful period of disruption.
It remains to be seen when consumers will feel comfortable flying, or whether businesses will still find value in business travel after teleconferencing for months.
Despite the gloom, there is room for optimism as markets begin to cautiously ease travel restrictions. Regardless of what the future holds, the travel industry will have to adapt and change won’t just happen upstream.
Back-end processes such as payments and cash flow management are an important opportunity for travel industry players to modernize and promote efficiency. Speaking to PYMNTS, PayParc Global Solutions Founder Taylan Taspinar spoke of the industry’s urgent need to upgrade its B2B payments strategy after a one-year delay in innovation – and why not just data , but industry-specific data is key to tackling friction.
A world of sore spots
According to Taspinar, it is high time for the travel industry to embrace the digitization of B2B payments.
“The travel industry is indeed very good at adapting to new technologies in general, and there are some incredible players who are bringing innovations to the industry,” he said. “However, it is strange that in terms of payments, not much has been done in recent years since the advent of the virtual credit card.”
While virtual cards are a step up from legacy manual payment tools such as direct bank transfers, they are not without challenges, especially as the payment needs of travel industry players become more complex. . Taspinar highlighted high costs, long payment times, and the need for manual intervention as some of the biggest B2B payment issues in the space, and as some of the reasons why, he said, “ the travel industry was already late in taking advantage of the innovations offered by the current FinTech revolution. “
With the global pandemic, but the shutdown of operations for many industry players, including buying companies like online travel agencies and industry suppliers like hotel chains and wholesalers, the pressure to optimize payment flow has become even more intense.
Taspinar explained that the pandemic has led insurers to pull out of the travel industry and remove coverage for vendors’ receivables. This has led these salespeople to demand bank guarantees or “large bank deposits” in order to agree to do business with someone.
“This has resulted in the freezing of a large number of business relationships in the travel industry,” he said. “So not only is the money shorter than ever, but the risk is also higher than ever, making the situation even worse for travel agencies.”
The journey ahead
While virtual cards and other electronic payment methods may support accelerated transactions and cash flow for industry players, they are unable to address today’s industry specific concerns. hui.
To optimize B2B payments while meeting the working capital needs of businesses, PayParc has created a proprietary payment platform to authorize and settle B2B transactions, with funds being transferred to businesses’ PayParc digital wallets in real time.
Speed of transactions is especially important for this space, as vendors need to access funds as quickly as possible. Instant payments are emerging as a “necessity” for the travel industry, Taspinar said, adding that the company aims to mitigate the risk that has exploded in this space in recent weeks by removing the need for insurance coverage or prepayments.
Data, which adds to this strategy, becomes an essential element in optimizing B2B transactions, both in the travel industry and elsewhere. It is also, however, one of the biggest hurdles in B2B payments, with a lack of standardization and integration preventing many buyers and sellers from seamlessly accessing the data they need for reconciliation, review. regulation and analysis.
For PayParc, this was an opportunity to use not only data, but also industry-specific data, to optimize B2B travel payments. Transactions are initiated by reservation data and funds may be transferred between wallets based on reservation details, payment date, cancellation policy or other factors. By combining this kind of industry-relevant data with broader transaction information, buyers and sellers can streamline workflows like reconciliation, Taspinar noted.
With so many uncertainties plaguing the travel world today, organizations can no longer afford to rely on outdated payment methods that require manual intervention. The potential of new rounds of lockdowns could add salt to injuries and further limit cash flow for companies in the industry, but as Taspinar said, innovation is key.
“We need to find solutions as quickly as possible under the current circumstances,” he said. “We think this is the only way to adapt and survive today.”