The third largest merchant acquirer worldwide, Worldpay, has more domestic acquiring licenses than any of its competitors and ranks first in processing card payments in the travel industry. The company’s global footprint is particularly attractive to international airlines. More than 130 airlines are Worldpay customers.

Worldpay has partnered with Mastercard to offer travel agents a virtual card they can use to pay airlines, hotels and car rental companies. While virtual cards have been available to online travel agencies from card issuers as well as acquirers and payment service providers for more than a decade, Worldpay is the first to market with an integrated service. It is the acquirer and issuer.

Worldpay’s virtual cards operate under the Mastercard Wholesale Program, which is not new, but Worldpay will be the first to offer travel agents Mastercard’s dynamic product code. This will permit online travel agencies and travel suppliers to mutually agree on payment and related terms.

Because Worldpay controls the issuing and acquiring, it can optimize the flow of funds between travel agents and the airlines, hotels and car rental companies that supply services.

One benefit is to provide the opportunity for the lowest interchange rate. This helps travel agencies protect the commissions they earn for selling tickets, rooms and rentals. They can also improve their working capital by gaining faster access to acquiring receivables to fund their virtual card payments.

The virtual cards will issued by Worldpay partners. Initially, the cards will be a commercial prepaid product, which means that all funds paid to suppliers are guaranteed. A credit card is expected to be available by the end of this year.

Worldpay’s many travel industry card acquiring customers already help it to better understand the credit risk exposure associated with the length of time between purchases from suppliers and the fulfillment of their services.

The cost of doing business includes higher than average chargebacks that acquirers must settle. This exposure is not fully mitigated by higher than average reserves against chargebacks that travel service providers must pay.

Worldpay believes that by serving as both issuer and acquirer on virtual card transactions, its risk liability will improve from gaining access to real-time data on when and where a supplier has been paid.

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