When it comes to enriching corporate card programs, the focus is on technologies and policies that can boost efficiency, visibility and controls.
According to a 2014 survey by the Global Business Travel Association Foundation, 70% of corporate travel and entertainment spending is covered via corporate cards. Cards “help run the business and even manage cash flow for small and midsize businesses,” says Jay Cary, vice president of digital and global channel management with American Express Global Corporate Payments.
In addition, “Corporates are generally deploying cards to a wider base of employees,” says Erik Tak, global head of card solutions with ING Commercial Banking. Their actions are prompted by technology that offers greater visibility into card use.
Indeed, technological advances have helped to drive corporate card use in several ways. For example, control and reporting capabilities continue to improve, notes Vikas Bansal, vice president and credit product line leader with technology provider Fiserv. A company can limit card use to certain types of merchants and limit the amount spent in total, as well as over a period of time. “There are controls from a merchant perspective, and in terms of limit and velocity,” Bansal says.
Many issuers can pre-populate transaction data into automated expense management solutions on a daily basis, says Tak. Combined with the deployment of solid reporting platforms, this “ensures increased visibility into card programs, resulting in improved policy compliance and better supplier information.”
Indeed, the practice of tying card data to expense management software is expanding from larger to midsize companies, says Richard Palmer, professor of accounting at Southeast Missouri State University in the US and research team leader with RPMG Research, which conducts market research in procurement practices. The reason? It can cut the cost of processing an expense report from about $40 for a paper version to $23 for a report created via expense management software, according to the 2013 Corporate Travel Benchmark Survey, conducted by RPMG.
THE CLOUD EFFECT
One driver of the technology advances showing up in card programs is the shift to Cloud computing. “It’s improving accessibility to corporate card information on the go,” Tak says. Employees can submit expense information from the road, allowing them to make use of downtime and speeding reimbursements.
Cloud computing also allows card program managers to tie together different databases, the technology provider says. For instance, a travel manager will be able to compare card purchases in different divisions, even if the information resides in different databases, to check which are getting lower prices.
Of course, each organization will have to decide how closely to track purchases, keeping in mind privacy regulations and employee acceptance. However, the potential benefits are compelling. “You can connect card spending information with other aspects of suppliers, goods and employees,” Palmer says.
Although the use of mobile technology in corporate card programs remains small, interest is strong. More than a quarter of respondents to RPMG’s Benchmark Survey use mobile devices to review and approve expense reports. In addition, 29% are planning to adopt mobile tech in 2015. “The technology is really evolving,” says Diane McGuire, managing director with the NAPCP, a global association for commercial card and payment professionals. But currently, the percentage of companies that use mobile solutions to pay for travel services or to establish and manage card accounts is generally low, at about 10%, the Benchmark survey found.
Although not strictly a corporate application, near-field communication (NFC), which allows payment from a device placed within a few centimeters of a payment terminal, promises greater transaction security, says Bansal. That’s because it requires an additional level of authentication, such as a PIN or fingerprint scan, to complete a transaction. “With NFC, someone can steal a phone, but they won’t know the PIN or how to unlock it.”
The future for corporate cards is promising. Technological advances are enhancing controls, efficiency and visibility, prompting greater use. “Companies are seeing the efficiency gains, whilst at the same time, the cardholder experience is enhanced,” Tak says.