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The banking sector is not particularly renowned for innovation, with many leading organisations using platforms that are nearly 20 years old.
In the travel and hospitality industry, however, dedicated players such as Airplus and Diners Club International have an advantage because they have developed platforms from the beginning.
“We have been able to innovate efficiently for nearly the last three decades,” says Head of Commercial and Partnerships at Airplus, Jay Patel.
“But we do understand that our customers are looking for more and we are now undertaking the biggest transformation in our organisational history, including modernised IT to lay the foundation for seamless end-to-end processes, data quality and customer proximity, and the introduction of a European Corporate Card,” he says.
The latter removes the need for a relationship with a bank to issue corporate cards in a European country where a company is opening an office – it will need an agreement only n w with Airplus. It is being rolled out in France n f from September and is expected to be available v a in 18 other European countries e by y the end of 2019.
Nonetheless, digital, ta mobile and virtual are the corporate card rd industry’s three big goals. The amount of data the cards collect is oceanic – broad and deep – and card companies are beginning to transform the data into valuable management information (MI), giving corporate clients improved reconciliation, more powerful vendor negotiation and deeper insight into employees' policy compliance.
Pre-paid cards may soon be overtaken by their virtual incarnation but they are still useful for temporary or intermittent travellers who need access to cash or to pay for services as they consume them – Citi no longer provides pre-paid cards.
Virtual on the move Meanwhile, virtual cards are fast becoming mainstream and when combined with mobile, will give companies a convenient payment
Digital, mobile and virtual are the corporate card industry's three big goals, writes
vehicle that provides copious transactional data for corporates to pore over.
“Virtual cards are the biggest growth area we have. They grew globally by more than 60% over the past four years and it is not just us – in our region, we saw 50% growth last year,” says Head of Wholesale Cards, CTS, EMEA for Citi, Steve Robson.
They are particularly useful where reconciliation can prove difficult for lodge cards, such as low-cost carriers, which have traditionally not given good data.
Citi is trialling mobile virtual cards with a facilities management client and hopes to launch it in the US by the end of the year. This allows a field agent who needs to fix air conditioning, for example, to order a part from a local store on a mobile, collect it and pay with a mobile virtual card, uniting invoice and client. It removes the need to order the part from a central supplier, who takes days to deliver it.
The platform can also play a part in crisis management. If a traveller’s wallet is stolen, for example: “We can send a virtual card to their mobile to allow them to buy items to see them through the rest of the day,” says Citi's Robson.
Mobile virtual cards can also help overcome a common problem at hotel check-out, when the traveller thinks the bill has already been paid centrally by virtual card, only to discover that has not been understood at reception.
“Mobile virtual cards deliver something tangible to the employee, making check-out like using physical plastic – and the funding source is still centralised,” says Director for Business Development for Mastercard, Ollie Fellowes.
Travellers can also use a mobile virtual cards for per diems in restaurants and taxis, removing the need for pre-paid cards or old fashioned cash for temporary employees or those with low spend.
And it works a treat for car rental too, often an ad hoc requirement that has traditionally been fragmented, with attendant scratchy data. “You capture the data at the point of transaction,” he says.
The amount of data that cards collect is oceanic – broad and deep – and card companies mpanies are beginning to transform the data into valuable management information” on
Recognising this problem, ground transport provider Karhoo has integrated virtual cards for payments, removing the need for cash. “We like this solution and are working to integrate their product into our range of options,” says Executive Director for Business Travel Direct, Andrew Perolls.
And one supplier in the oil and gas industry is planning to pay suppliers with virtual cards to smooth cash flow and manage thousands of suppliers who get paid in small amounts.
Diners Club has products for general expenses, purchasing, event management and businesses who book travel direct, all with dual Diners Club/mastercard networks. “Single use virtual cards can be embedded within the account and single use card transactions will appear on the same statement,” says Diners Club Marketing Director, Adrian Steele.
The organisation launched a company card this year with added functionality, including: dual networks, receipt capture and storage with statement, VAT reconciliation automated within account downloads, enhanced data options included with each transaction (for example, cost centre, staff ID, etc) so that expenses can be automated without an expense management system, and improved daily uploads to expense management systems.
“The new Diners Club Company Card has been developed to set a new standard for the company card, making the under-served SME market a thing of the past,” says Steele.
In the US, Bank of America Merrill Lynch (BOAML) still witnesses pre-paid cards being used more commonly than virtual, but elsewhere: “Virtual cards have very much taken off in corporate life worldwide,” says Head of Global Card and Comprehensive Payables for BOAML, Jennifer Petty.
Barclaycard launched virtual card Precisionpay last year to complement its debit, credit and pre-paid options. It operates in the same way as walking plastic in that Barclaycard settles the bill and customers pay at the end of their billing cycle. “This can boost working capital, even when card payments don’t seem to be an option,” says Director Commercial Payments, Maria Parpou.
At engineering company Cullum, senior management has a credit card and employees working on sites have charge cards with an assigned limit per person. The company also uses pre-paid cards, depending on the site location or security issues, for example.
Hotels are largely paid for centrally by Cullum and in advance, leaving expenses to be picked up by employees. “We give them a charge card with an assigned limit per person and they can add to that in the field to cover unexpected expenditure or emergencies,” says PA to the Directors, Cherry Salvesen. However, “We are looking at new ways of spending and virtual cards might be part of that.”
Continental Teves trialled virtual cards, limited to one transaction for a meeting but has not rolled it out yet. “In principal, it
Mobile virtual cards deliver something tangible to the employee, making hotel check-out feel like using physical plastic – and the funding source is still centralised”