To simplify these payment categories, Mastercard is partnering with the Medical Tourism Association to provide virtual card technology for arranging treatment, booking travel and making payments.
"Patients have to think about it when it comes to the medical part. What type of trip do they have to take? And everything else that's involved in the surgery," said Chad Wallace, executive vice president and global head of commercial solutions for Mastercard. "Then they have to think about the travel involved."
Medical tourism, which is generally defined as traveling internationally for medical care, is a $47 billion industry, according to
Right now, there aren't many ways to streamline the steps that go into medical tourism.
"Currently in medical tourism there is very little technology for anything," said Jonathan Edelheit, CEO of the Medical Tourism Association, a trade group that works with consumers, health care providers, governments, insurance companies, employers and other organizations that have responsibilities to fund health care needs that cross international lines.
"It's not easy to book something and be sure of security, or to easily manage the documentation involved — especially where there's an international translation involved with different compliance or health care policies," Edelheit said.
Travel for medical care is often paid via wire transfers, with the travel and medical care components usually managed separately.
Payment in medical scenarios is traditional, mainly involving cash, debit cards and bank transfers, with limited use of credit cards, according to Meng Liu, a senior analyst at Forrester, who said that for cross-border medical services, the timeliness of payments is low due to international wire transfers often taking more than a day.
Through the Mastercard/Medical Tourism Association partnership, patients can book and pay for their treatment via the association, which provides a portal to view procedures, providers and invoices. The association will issue a virtual Mastercard to execute the payments. Virtual cards will provide security, transaction controls and real-time remittance data to speed reconciliation.
As part of the collaboration, the partners are developing a platform that uses Mastercard's payment products to combine medical payments and travel. The platform will enable scheduling and paying for medical care, and reserving travel, local transportation and lodging through the same user experience.
Virtual cards have an account number that is separate from a physical card, so it's not simply a digital representation of a credit card.
Adding a health care/travel combo is a way for Mastercard to compete in a market in which banks and other payment companies are racing to find
"We've seen benefits in procurement, where checks and cash are converted to virtual cards," Wallace said. "We've been applying that to the travel industry, and we're also looking to other industries."
Mastercard can leverage its work in B2B travel, health care and insurance. Some of the work the card brand did to develop a platform that automates claims and virtual cards for in-office medical care can be used in the technology stack for medical travel. "Our experience in travel and health care helped us to come up with a go-to-market plan for our work with the MTA," Wallace said.
Mastercard's virtual card project can enable patients to choose their preferred payment method, offering a smooth experience similar to local digital payments, Liu said. "At the same time, for the MTA and partner medical institutions, the virtual card can support B2B payments between them."
B2B payments based on virtual cards offer higher security and programmability, thanks to card tokenization technology, which can make it more convenient for businesses to reconcile accounts and reduce fraud, Liu said. "With the further growth of cross-border medical tourism, virtual cards will become one of the mainstream payment methods," he said. Mastercard's rivals Visa and American Express did not provide comment by deadline.
The Mastercard/MTA collaboration highlights that the focus should be on the customer journey, regardless of the industry, especially when there is complexity, according to Gareth Lodge, a senior analyst at Celent.
"And underpinning that, there needs to be a seamless payments experience as well. Making that easier and less risky will certainly improve the take-up for apps like this," Lodge said. "Conversely, get it wrong, it will certainly impact take-up and usage."
