ConnexPay took more risk out of payments. But that’s just the beginning of its benefits for travel agencies.
By Bob Kaufman
When I founded ConnexPay in 2017, we were the first company to fundamentally remove risk from payment transactions by connecting merchant processing and virtual card issuing into one solution. By linking two formerly separate systems, we now have visibility into the entire payment process, mitigating the payments risk and allowing for greater cost savings.
For many travel agencies, holding less payments risk is game-changing enough for their business (see our previous blog to learn more about the risk inherent to travel agencies and marketplaces). Reducing risk with ConnexPay can often mean gaining 1% to 2% in savings on every transaction. This is significant when agencies operate on very thin margins often only making a couple percent on every transaction.
However, we found that reducing the risk and fees associated with payments was just the beginning of addressing the most common payments pain points for travel agencies. Let me reveal the additional benefits that naturally emerged when ConnexPay linked incoming payments with supplier payments in one comprehensive solution.
When cashflow isn’t flowing
Let’s walk through a very typical scenario for agencies that don’t use ConnexPay. Say a client wants to book their dream vacation. Hooray! They send the agency their credit card information, the agency processes it with their merchant account (and pays higher fees to boot), but now that travel agency has to wait up to three business days to actually get the funds in their account.
Meanwhile, the agent still needs to purchase the flights, hotels, etc., to lock in the pricing they’ve quoted to their client. At that point, the agency’s options are to front their own money or secure a line of credit. When they have to outlay that kind of money continuously, and at scale, there’s now a major cash flow problem.
This example shows us why some travel agencies decide to stay out of the payment game altogether. Instead, some agencies send their client’s credit card information onto the airline or resort to book and just wait for their commission from the travel vendor, 30 days later. Imagine waiting an entire month to see the profits from your services. Not to mention the lack of payment security in sending the customer’s card information around the world.
Aside from reducing risk, improving cash flow was another major issue ConnexPay solved for travel agencies. With ConnexPay, travel agencies process the customer’s card one time, and ConnexPay allows immediate access to the authorized funds to pay the supplier via a virtual credit card (essentially, a digital and very secure credit card number) in real time.
Because ConnexPay is on both ends of the payment transaction, we can resolve the cash flow issue without lines of credit, large cash reserves, or 30-day delays.
Don’t lose customers over a poor payment experience
Any busy travel agency likely spends a lot of time focused on growing its marketing presence. Building a killer website. Putting together a great customer experience with competitive pricing. And they do all of this to finally capture a customer.
But yet, when it comes to the most instrumental part of the transaction — the payment — they either turn that part over to somebody else, or their systems are so disconnected, the experience is lengthy and frustrating. Put another way, the customer experience and the payments experience are interchangeable. You can’t have one without the other.
After the events of 2020, we heard from many agencies that their outdated payments processes were no longer going to cut it. When their hard-won customers have to spend 8 hours on the phone with the airlines because the agency didn’t have control of the payment experience, something has gone seriously wrong.
ConnexPay allows travel agencies to truly “own” the complete customer relationship by giving them full control of pricing and payments. We all know changes in travel happen a lot. When a business is not acting as the merchant of record or doesn’t have a seamless process, it loses control of customer experience.
Connecting the dots with better reconciliation
Aside from travel agencies, I can’t think of another industry that sits in the middle of so many partners with the details of each purchase constantly changing. On one side, there are thousands of potential travel operators and suppliers. On the other side, there is an endless pool of potential customers. A travel agency serves as the intermediary between all of these various connection points and often has very complicated, even downright burdensome, reporting requirements to keep all of the details straight.
When ConnexPay connected the payments, it connected the recordkeeping as well. The reconciliation reports are built right into the ConnexPay customer portal, which itemizes the customer sales and matches them with the corresponding purchases.
Working solely with virtual cards in a connected payments ecosystem means recordkeeping is automated by design. All incoming and outgoing payments are tied together with unique codes that allow for easier reporting. All this to say, it frees up administrative and accounting teams to dig into other business priorities rather than chase after complex reconciliation tasks.
Looking ahead to the recovery
The challenges for travel agencies are numerous — especially now. But by addressing cash flow issues, allowing agencies to truly “own” the payments function, and making their lives easier with automating reconciliation, it is no question that ConnexPay’s clients are being given a complete payments solution unlike anything else in the market.
The ConnexPay story is one of making connections, streamlining operations, and creating an entirely new category of payment tools for travel agencies. That was the vision when I set out to start ConnexPay, and it’s most certainly the direction we’ll continue as our company grows and evolves.
ConnexPay provides new benefits to travel agencies and marketplace companies.
Looking to get more out of your payments? Meet with our payments specialists to discuss how ConnexPay can improve your payments processes today.