What VCC means
A virtual card works like a normal card number, with a 15 or 16-digit number, expiry date and security code, but it exists only digitally and is linked to an underlying card account held by the business. The issuer lets the buyer set controls: one transaction only, a maximum amount, specific dates, or a single supplier or merchant category.
In travel, VCCs are most common in hotel distribution. An OTA or bedbank collects payment from the guest or agency, then generates a card capped at the hotel's net rate and passes it to the property with the reservation. The hotel charges that card at check-in or after the stay, according to the booking terms, and never sees the guest's own card.
VCCs also have a commercial side. Because each card payment carries interchange fees paid by the supplier, issuers often share part of that revenue with the business running the programme. Specialist providers cited by AltexSoft in 2023 include WEX, Conferma Pay and Outpayce from Amadeus. The same interchange cost explains why acceptance is uneven: airlines tend to prefer BSP settlement, and some hotels and smaller suppliers still ask for bank transfer.
How VCC works
A typical hotel VCC flow links one card to one reservation from booking to charge.
- Booking is confirmedA traveller or sub-agent books a hotel through an OTA, TMC or B2B portal, which collects payment or debits the agency's credit line.
- Card is generatedThe platform asks its card issuer for a virtual card set to the supplier's net amount, currency and stay dates, often restricted to hotel merchant categories.
- Details reach the supplierThe card number, expiry and security code are sent to the property with the booking, through a channel manager, extranet or secure link rather than plain email.
- Supplier charges the cardThe hotel charges the card within its valid window, usually at check-in or check-out, and bills any extras to the guest separately.
- Reconciliation and rebateEach charge maps to a single booking reference, which simplifies reconciliation. Depending on the programme, the issuer later pays back a share of interchange.
VCC in practice
Illustrative example: a B2B travel platform sells a three-night hotel stay to a sub-agent for US$450, and the hotel's net rate is US$390. The platform debits the sub-agent's wallet, then issues a single-use virtual card for US$390, valid from the arrival date to seven days after departure. The hotel charges the card at check-out; minibar and parking go on the guest's own folio.
In a survey by card issuer WEX, published as sponsored content on PhocusWire, 74% of 256 surveyed hotels accepted virtual cards. WEX advised hotels not to authorise a pre-authorised virtual card a second time, since the duplicate can cause a decline, and to keep the virtual card on its own folio for agreed charges only. AltexSoft notes that Booking.com activates its VCCs one day after check-in.
Who uses it
Advantages and limitations
Advantages
- Each card is tied to one booking, so reconciliation and dispute handling are much simpler.
- Amount, date and merchant limits reduce fraud and overpayment.
- Guest and company card numbers are not shared with suppliers, which reduces card data exposure.
- Interchange revenue sharing can turn supplier payments into a source of income for the intermediary.
Limitations
- Not every supplier accepts virtual cards, and smaller or international suppliers may insist on bank transfer.
- Suppliers pay card acceptance fees, which some resist or try to pass back through rates.
- Front-desk charging errors, such as charging too early or authorising twice, can lead to declines and disputes.
- Systems that store or transmit VCC details still fall within PCI DSS scope.
Frequently asked questions about VCC
Why do hotels receive virtual credit cards from OTAs?
When an OTA collects payment from the guest at booking, it still owes the hotel the net amount. Rather than sending a bank transfer, it issues a virtual card for that amount and passes it with the reservation. The hotel charges the card on the agreed date, and the guest's own card details stay with the OTA.
When can a hotel charge a VCC?
Only within the validity window and up to the amount set by the issuing intermediary. Many cards become usable on or just after the arrival date, and AltexSoft reports that Booking.com activates its VCCs one day after check-in. Charging before activation usually results in a decline, so hotels should follow the instructions sent with each booking.
Do travel companies earn money from virtual cards?
Often, yes. Card issuers earn interchange from the supplier on each payment and commonly share part of it with the business that runs the card programme. Industry articles cite rebates of roughly 0.5% to 2% of transaction value, depending on card type, supplier category, volume and the issuer agreement.
Can airlines be paid with a VCC?
Sometimes, but it is less common. Agency airline tickets are mostly settled through BSP or ARC, and AltexSoft reports that airlines often restrict virtual card payments because of card acceptance costs, comparing interchange with the much lower cost of BSP clearing. Agencies should check each airline's accepted forms of payment before relying on a virtual card.
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