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Lesley's Column

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6th June 2016

Mobile payments

Apple Pay has brought mobile payment technology into mass use, and in 2016 innovative corporates will increasingly adopt this technology for travelling employees.

Smartwatches and the like have already succeeded in capturing significant territory in the marketplace and by 2018 at least 83 million units from a variety of brands are expected to have been purchased.

But virtual cards and mobile payments through services like Apple Pay, Android Pay and Samsung Pay have yet to become ubiquitous in corporate travel due to a variety of challenges.

I have personally implemented the use of virtual cards as a payment mechanism for infrequent travellers – ie, those staff who do not have an individual corporate card or travellers who don’t work for the company.

The majority of the time they are used for hotel stays instead of traditional bill back. Due to the expense reconciliation process used by travel managers, mobile payments are unlikely to become popular.

Business travellers who carry an American Express corporate card can now add the card to the Apple Pay payment system.

Amex has become the first corporate card to adopt contactless payment which allows users to pay for goods and services with their iPhones or Apple Watch.

When an Amex card is added to Apple Pay, the card numbers are not stored on the device or on Apple servers, hence some of the issues with reconciliation.

A unique ‘device account number’ is assigned, encrypted and securely stored in the secure element on your device. Each transaction is authorised with a one-time unique dynamic security code.

It is anticipated that 2016 will be the year when smartphone payments move into the mainstream, with a 210% increase in use predicted over 2015, but the impact on corporate travel is yet to be determined.