The True Cost of Virtual Cards in Travel—and Why Leading Travel Agencies Are Making the Switch
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In today's competitive travel market where margins are razor-thin, Online Travel Agencies (OTAs) can't afford to overlook hidden costs in their operations. Virtual Credit Cards (VCCs), despite their widespread adoption, are silently eroding profitability through multiple channels.
VCC payments incur interchange fees of 1.5-3.5% per transaction. For a mid-sized OTA processing $10M annually, this means $150,000-$350,000 in direct payment costs eating into profits.
International bookings trigger double currency conversions:
Each conversion includes a 1-3% markup above mid-market rates, adding approximately 2.4% in costs for international payments.
The operational burden of VCC reconciliation is substantial:
For mid-sized OTAs, these operational inefficiencies cost roughly $120,000 annually.
Beyond the commonly discussed interchange fees, VCCs impose a range of costs directly on travel agencies:
PayDocker offers a direct bank-to-bank payment alternative that dramatically reduces costs:
Most OTAs can complete the transition to PayDocker within 30 days, with ROI achieved through:
Industry analysts project that by 2026, direct payment systems like PayDocker will become the dominant payment method for supplier settlements in travel. For OTAs still using virtual cards, the question isn't whether to change, but how quickly they can implement alternatives before competitors gain an insurmountable cost advantage.
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