Can you please introduce actuary.aero in your words, and tell us about your products and services?
Livia Vité (LV) – We turn complex payment data into intelligence teams can use. This helps our stakeholders across payments, settlement, and risk, to work from the same view of exposure, so decisions are faster, safer, and easier to scale.
What are some of the main challenges your stakeholders face?
LV – The B2B travel industry is both highly globalized and very fragmented, between travel intermediaries such as online travel agencies (OTAs), payment facilitators such as virtual card issuers and acquirers, and suppliers such as airlines and hotels. And it’s typical for buyers to add different travel “bricks” (flights, hotels and car rental) separately. This means that all these actors aren’t always clear on their risk exposure – meaning the possibility that travel plans might be changed or cancelled, the airline declares bankruptcy etc.
In the travel payment flow, someone at some point faces risk, but it is difficult to see and understand the evolution of that risk. This is what we aim to solve.
François Burtin (FB) – Historically in the business segment of the travel industry, card issuers have not extended credit terms to travel agencies. Instead, they’ve offered pre-paid cards, forcing travel agencies to tie up cash that could instead be invested in business growth.
Can you tell us more about the partnership between Actuary and Allianz Trade?
FB – We are partnering with actuary.areo to extend payment terms into the business travel industry via the card issuers, through Allianz Trade pay. actuary.aero translates payment data for each transaction into risk signals, and provides the technical connection between this data and our risk underwriting capacity in real time.
LV – Our first deployment is with a major global B2B virtual card issuer serving consumers and corporate clients across every sector. By integrating our joint solution directly into their existing payment processes, they can now offer payment terms to their virtual card customers. This is a meaningful shift in how credit flows through the travel payment chain.
How do partnerships such as ours address the aforementioned challenges and add value for our customers and stakeholders?
FB – Integrating Allianz Trade pay directly into the payment flow via virtual cards enables card issuers to grant credit terms to OTAs more securely, and reduce their exposure to risk in the travel payment flow. Put simply, we insure the card issuer against nonpayment risk, meaning if the travel agency fails to pay their obligations we are responsible for collections and indemnification. This also enables OTAs to increase their credit capacity, since they don’t have to pay upfront for VCNs.
LV – Travel intermediaries have created workarounds to these pain points that aren’t real solutions – they are also time-consuming and onerous. In the past, travel intermediaries were also taking out multiple virtual cards (prepaid), which has a direct impact on working capital as OTAs often need to settle immediately to their travel suppliers. On top of this, they have high transaction volumes, but very narrow margins, which adds to the strain on their working capital – and highlights the value of flexible payment terms.
What would you say are our complementary strengths?
LV – I’d say the strength of our partnership is based on the agility of a fintech and the footprint of a global insurer. We are both open to innovation and are determined to solve these major pain points in travel industry.
FB – This is the tip of the iceberg – we are applying this solution today to business travel, but there are so many other potential applications in other sectors as well.
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