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Tuesday, 18 December 2012

Next Generation Lodge

Lodge or ghost card programs have been synonymous with corporate T and E settlement for over 30 years. With the IATA number serving as a unique identifier for ease of reconciliation, the lodge cards are especially well established and embedded in the settlement of scheduled airline tickets.

However it is a product that has also been static for many years, with limitations that inhibit its use across the full spectrum of corporate travel.

Heavily dependent on exterior data flows, the transportation of files is a process that is highly susceptible to error. It is difficult to standardise file deliveries across geographies as different organisations have different file creation capabilities and processes.

Lodge cards inherently lack rigid controls on manually collating disparate sources of information to produce a reconciled view. Therefore the industry standard matching rates hover around approximately 95-98% accuracy. You may think that this sounds a satisfactory matching rate. However, the outstanding 2-5% of unmatched data is highly costly and inefficient for the corporate. Consequently banks don’t value it and therefore don’t search for innovative resolutions.

Corporate travel settlement is changing. Using a virtual card, with its PAN serving as a unique reference number, guarantees 100% matching rates to eradicate the cost and time lost to the unmatched data that we mentioned earlier. With nearly real time data flows, virtual card data is managed within the booking process in the GDS, and can be processed in monthly or periodic batch processes.

Not reliant on the creation and transmission of exterior data, the systematic reconciliation means human intervention is not required, eradicating the risk of human error involved with lodge cards.

However the virtual card’s most valuable attribute is its applications across all areas of travel spend. Not just air, but also hotels, rail, car hire and all other areas of online spend.

·         Commercial benefit:

o    Applies lodge card controls across areas of incremental spend

o    Enables significant increase in billings without additional operational costs

·         Enhanced security:

o    Order and authorisation data captured prior to secure payment is deployed

o    Creates a secure PCI-DSS compliant Passenger Financial Record (PFR) for each transaction

·         Increased controls:

o    Control of variables such as amount, validity and merchant category

o    Enhances workflow and enables real time refunds and amendments

·         Flexibility:

o    Single process applicable to multiple content sources, not just IATA air

o    Allows secure deployment of CVV2 number

·         Reconciliation:

o    Unique PFR applied to each transaction

o    Need for manual/additional reconciliation process eliminated


1 comment:

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