Author: r b

COVID led many tour operators to offer additional flexibility for bookings.

While this won’t continue in all cases (British Airways recently announced the end of their flexible booking policy), consumers affected by COVID cancellations are still likely to remain wary, and are more likely to ask questions about a tour operator’s processes if things do go wrong.  

This means it’s more important than ever to be transparent with customers about the ways you’re protecting them. Funds safeguarding is an important part of that process, giving your customers the confidence that, should the worst happen and your firm goes out of business, their funds are protected. There are also broader benefits to your business and your brand from doing so. 

Legal requirements for funds safeguarding

Legally, tour operators must arrange financial security to protect funds paid for package holidays sold in the UK in the case that they go out of business, as well as legal protection to ensure that customers receive the services they paid for. Arrangers of “linked travel arrangements”, where multiple travel services are purchased separately by the same supplier, must also arrange financial protection in the event they go bust, although passengers booking via this method don’t receive the same level of legal protection as those booking package holidays. 

Outside of those two situations, there are no legal requirements to offer safeguarding of your customers’ funds. However, having a clear policy on how your customers are protected in the case of unexpected problems is likely to remain a strong trust factor, increasing conversion and improving the way customers perceive your brand. 

Methods of safeguarding

Tour operators and other travel providers can arrange financial protection for their customers’ funds in a number of ways. The one customers are most familiar with is through membership of a financial protection scheme such as ABTA or ABTOT. Bookings including a  flight are also covered by the ATOL scheme, administered by the Civil Aviation Authority. 

Travel companies can also take out insurance to cover them in the case of financial failure. Alternatively, they can choose to deposit customer funds into a safeguarding account.

How does a safeguarding account work?

A safeguarding account separates customers’ payments towards non-completed bookings from the rest of a travel company’s finances, holding the funds securely until a customer’s trip has been completed. At this point, they’re released to the travel company and become part of their regular cashflow.

It’s not enough for travel companies to simply set up a separate account for customer funds. A trust account needs to be managed independently to guarantee to consumers that the funds won’t be used by the business before they’ve fully discharged their contractual obligations, preventing pending funds being lost if a firm finds itself in financial difficulties. 

Why choose a safeguarding account over insurance?

When big shifts happen in the travel industry, insurers feel the pinch. Since Thomas Cook’s collapse in 2019 followed by the pandemic, many insurers have left the market, causing an increase in insurance premiums and making it harder for travel companies to access appropriate insurance products. 

Depending on a company’s circumstances, holding customer funds in a safeguarding account could be a more cost-effective method of keeping funds secure, as the cost of maintaining the account could be cheaper than rising insurance premiums.  

A safeguarding account also removes the need to go through the process of claiming against an insurance policy if things go wrong – the money is already there, ready to refund to customers. This gives a strong level of consumer protection as there’s no risk that an insurer chooses not to pay out (or goes bust themselves and is unable to). It also means that travel firms can choose to offer protection for a wider range of circumstances if they wish – insurance typically only refunds customers in the event that the tour operator they’ve booked with goes bust. 

Why use safeguarding over bonding?

Most customers are familiar with the idea of a bonded tour operator – somebody who, as a member of a scheme like ABTA or ABTOT, has financial protection in place in case of their failure. However, claiming funds back via these schemes can be time-consuming and stressful, and again, schemes can come under pressure when there are large-scale issues within the travel industry. 

Safeguarding funds directly can offer an extra benefit that sets a travel company apart from its competition – going the extra mile to protect customers’ funds not only boosts your brand’s trust and increases conversion in the short term, but it can help you to protect your reputation in crisis situations, allowing you to refund customers quickly and efficiently. 

Boost your financial stability by safeguarding funds

While insurance or membership of a scheme like ABTA can fulfil your legal obligations as a tour operator and keep your company safe if things go wrong, safeguarding funds directly can actually help to ensure that your company is more financially stable in the long term. 

By actively segregating pending funds from actual profit, you can maintain a clearer picture of your business’s finances and avoid inadvertently getting into a situation where you’re using customer funds as working capital. This means that if the worst does happen in the form of a future travel crisis, your business is on solid financial footing, and is as well-placed as it can be to weather the storm. 

Secure safeguarding accounts with B4B

As part of the Banking Circle group of companies, B4B Payments’ corporate payment accounts give you everything you need to manage your travel company’s payments effectively. From accepting payments in multiple currencies to making fast, cost-effective cross-border payments to suppliers or tour guides, our accounts help you streamline your payment processes and reduce costs. 

Our safeguarding account functionality also offers a secure method of storing customer funds ahead of their trips, offering them full confidence that their payments are being held securely and independently, and that they’ll receive a refund if anything goes wrong. With full transparency and oversight and support from our team of payments experts, we can support you to ensure that customer funds are held safely and compliantly. 

To find out more about B4B Payments’ safeguarding accounts, get in touch today. 

Freight logistics is an exercise in extreme process optimisation, in search of the most efficient and effective approach to maximise reliability and profit.

Payments and account processes can add a significant amount of time to your processes, but many freight firms still rely on paper invoices and old-fashioned expense management. Streamlining your internal payment processes can help your operations run quickly and seamlessly, saving time for your drivers and your accounts team whilst helping you to present a professional image to your clients.  

Simplify lumper fees with virtual prepaid cards

An unpredictable element of freight logistics is the payment of “lumper fees” – payments made to casual workers for helping to load or unload vehicles. Often, paying lumper fees is left down to truck drivers themselves, who need to carry cash and front the payments themselves before claiming them back as expenses. Not only does this add pressure to your drivers’ finances, it could leave them open to financial loss – carrying cash can be risky. 

Instead of requiring drivers to find their own solutions to pay lumper fees, virtual prepaid cards could offer a fast and secure alternative. Cards can be loaded with funds instantly and delivered to an individual’s email address, giving them the option to spend their funds in millions of locations worldwide. This saves your drivers the stress of making payments themselves, and gives you full transparency and control over lumper fee payments. 

Streamline driver expenses

While most logistics firms use a fuel card scheme to make savings on fuel costs, truck drivers incur a wide range of other expenses as part of their job, and they’re often expected to cover these costs themselves and claim them back as expenses later. From food and accommodation to vehicle repairs and consumables, these costs can add up, and could put pressure on your team’s finances, reducing their engagement and risking increased turnover of hard-to-find professional drivers, as well as causing significant issues and delays if a driver is unable to meet an unexpected expense themselves. 

Broadening your payment card system to incorporate a wider range of expenses than just fuel could make your drivers’ lives significantly easier, and help your day-to-day operations run more smoothly. With prepaid expense cards auto-topped up to a predefined limit, your drivers will never find themselves struggling to pay for essentials when on the road. With the ability to instantly upload photo receipts via a cardholder app, they’ll also save time processing lengthy expense claims, and make your finance team’s reconciliation considerably easier too. 

Make fast, seamless international payments

If you’re in the process of scaling your freight logistics firm, you’ll know just how important trust is in the industry. Your clients need to believe that you’ll do what you say you will, and communicating that trustworthy appearance means being reliable not only in the execution of your contracts but in all the services and interactions that surround it. 

There’s nothing worse than starting out on a contract with a new client only to have the relationship tarnished by payment issues. Even though payment delays can happen and they’re often not your fault, the added stress can make it harder to establish trust and project a professional image, particularly if you’re a new entrant to the market. 

It makes sense, then, to ensure that your payment processes are as robust and reliable as possible, particularly if you’re transferring funds internationally. While high street banks can charge high fees for payments which can take days to go through, a specialist payment provider can give you access to a range of different payment protocols, with faster settlement times and no hidden fees. A specialist provider can also offer easier management of bulk payments, minimising the risk of slip-ups within your payment team, too.

Offer instant bank payment options

If you’re receiving large payments regularly, card fees can start to add up and over time can be a significant drag on your bottom line. It’s tempting to encourage clients to make bank transfer payments instead, but these can be harder to keep track of, not to mention slower. If an urgent job is in the offing, waiting for a bank transfer to be confirmed could cause unacceptable delays, leaving card fees as the only option.

New technology based on Open Banking could help your company to accept bank transfers even when time is of the essence. A new breed of fintech companies, called PISPS (payment initiation service providers), offer direct bank transfer as a payment option alongside card payments. Your clients go through a checkout process similar to making a card payment except that the payment is taken directly from their bank account. You’ll get instant confirmation as soon as the transfer is confirmed, meaning you can get on with the job in the full confidence that your payment has been received. 

Transform your freight logistics payments with B4B

Whatever stage of growth your freight firm is at, B4B Payments’ advanced corporate payment solutions can help you make your payment processes faster and cheaper. From flexible prepaid cards to make expense management a breeze through to advanced corporate payment accounts offering fast, affordable international payments, we can support your business to build a global presence with cutting-edge technology and expert guidance. 

To find out more about how we can help, contact us today.   

Insurance technology attracted a record $15bn in funding in 2021, cementing itself as a big player in the fintech space.

Insuretech is set to transform almost every aspect of the industry, from quotes through to claims handling, with immense potential to offer customers a more flexible, tailored experience. Better still, insuretech tools can also help to streamline internal processes for insurers, minimising time-consuming admin and maximising profit margins. 

Flexible and on-demand cover

The digitalisation of the insurance industry is most apparent in the increased flexibility available in insurance products. As well as purchasing cover online, customers can quickly make changes to their policies on-demand, reducing strain on call centres as well as providing a better overall customer experience. 

Another fertile path for insuretech is on-demand insurance, allowing learner drivers to purchase coverage on a car owned by themselves or somebody else for just a few hours – perfect for those who only need to drive once or twice a week to practice, and for whom a full annual policy might be prohibitively expensive. 

Artificial intelligence

AI technology is transforming a huge variety of industries, offering the potential to streamline laborious manual processes and complete simple tasks without the need for human intervention.

While in some areas the use of AI is controversial – recruitment, for example, where AI CV screening services are under scrutiny for potentially introducing bias into the process – there are other areas where machine learning technologies can outperform even the most skilled human brains. 

Insurance underwriting is one such area. With the ability to analyse huge datasets to identify trends and uncover new insights, AI is supporting insurers to increase efficiency and assess risk levels more effectively.

AI is also rapidly finding a home in other areas of insurance too, for example AI chatbots to answer simple customer queries and escalate more complex ones to the right team.

Embedded insurance

Embedded finance is the integration of banking systems into non-banking organisations – for example, the addition of “buy now pay later” or instant finance options on purchases, built directly into a retailer’s checkout process. Similarly, embedded insurance is on the rise, and is predicted to be worth over $700bn by 2030. 

Embedded insurance can be highly visible, for example, offering cancellation coverage during event ticket purchases for an additional fee. However, the greatest potential for embedded insurance lies in more subtle applications. For example, insurance which is automatically bundled with short-term car hire or e-scooter rental means that consumers can simply rent their vehicle without the hassle of arranging separate coverage. 

Instant payouts

The insurance claims process can be a lengthy one, causing stress for customers as well as a drain on insurance companies’ profits through the large amount of manual work involved. It’s no surprise, then, that insuretech companies are targeting this part of the insurance process to make it more streamlined and efficient.

Claims processing is another area where artificial intelligence is coming to the fore. For simple claims, an AI-driven process can scrape data from documentation provided by a customer and, if it meets the required standard, process an instant payout. 

This process not only saves significant resource time, freeing up claims assessors to focus on more complex cases, but can reduce instances of payouts being challenged or rejected. The faster an insurance claim is settled, the lower the likelihood that a customer will challenge the payout, and this can reduce the overall value of claims paid out, significantly increasing profit margins.

Make faster, easier insurance payouts with B4B Payments

With such a wide range of potential benefits, it’s easy to see why insurance firms are turning to technology to fuel their business growth. With B4B Payments’ end-to-end payment offering, we offer everything you need to build your own embedded finance offering, from flexible payment accounts through to instant payments on easy-to-use prepaid cards.

To find out more about B4B Payments’ services for insurers, get in touch today.