Alliance Reservations Network implements tool that offers one-time-use, virtual credit card for merchant-model hotel transactions
Salt Lake City, UT — January 22, 2004 — Alliance Reservations Network, one of the largest destination marketers on the web, has integrated GE Corporate Payment Services' vPayment electronic settlement tool in its hotel booking process.
According to GE, the typical intermediary agency pays for the guest's reservation 30 to 60 days after checkout. Some large online agencies even pay hotels 90 to 120 days later. With a reservation guaranteed by vPayment, GE said the hotel is able to collect payment on the date of checkout. The virtual account is activated when the guest first books a reservation and pays for the room-and-tax amount only. The hotel processes the vPayment MasterCard account number just like a typical credit card transaction.
Peter Bertenshaw, president and CEO of Alliance Reservations Network, described vPayment as a win-win for the intermediary and the hotels. "All of the hotels we've talked with are excited about the prospect of getting paid on the date of checkout, as well as the time their accounting departments will save by not chasing down collections 120 days after their guests check out. Hotels won't wait for payment while intermediaries make money on the 'float.'"
In addition, the vPayment account given to the hotel at time of the reservation has transaction-specific dollar and date-range limits, Bertenshaw said. This capability ensures the hotel charges the correct amount, and streamlines the reconciliation process for the hotel and Alliance Reservation Network.
Jeffrey Dye, senior vice president of GE Corporate Payment Services, cited another benefit. "vPayment streamlines international reservations by eliminating letters of credit, and expensive wire transfers, drafts and overnight shipping of checks. This gives international hotels looking for more merchant-model distribution an opportunity to expand business without taking on additional risk for that inventory."
Any hotel that accepts MasterCard credit cards can use vPayment, Dye said. More than 10,000 properties have settled transactions with vPayment in recent months. GE Corporate Payment Services introduced vPayment in December 2001, and since that time dozens of companies have paid for more than $500 million in goods and services.