Just as in the larger world of payments, the corporate card environment is changing rapidly
For today’s consumer, technology is producing a drastic shift the way they make payments. Whether it be sending a friend cash via a mobile app, or paying for a product with a digital wallet like Google Wallet or Isis, technology has brought a revolution to the payments ecosystem.
The same revolution is happening in the corporate card space, if a bit slower and not as pronounced compared to the consumer world. Today’s corporate card providers are establishing new partnerships and innovative processes to deliver better security, greater flexibility and more valuable data for corporate programs.
Using mobile devices in the corporate travel program makes the experience far easier to manage for everyone involved, says Steve Pedersen, VP of corporate payment products at BMO Financial Group.
Pedersen says one aspect of that is integrating corporate card information into a mobile device so travelers can use it to pay for travel expenses where applicable. This is not just to provide them with a hip, new way to pay for things; it has a pragmatic purpose as well. For example, Pederson says some companies are starting to issue “virtual cards” to employees who occasionally have need to make a corporate expense, but don’t travel frequently enough to justify issuing them their own physical card.
Also, he adds that having instant access to travel and expense data is a great boon for not just the traveler but the program manager as well.
“Data is important,” he says. “Travel managers need to understand how people are using the program so they can figure out how to optimize it. Mobile devices provide a much more immediate access to information.”
Having quick access to this information is increasingly crucial for travel managers, who Pedersen notes are working in close conjunction with the financial and other departments of the business.
“Travel is still one of the largest expense items for a company," he adds. “And every company is doing what it can do to keep costs down.”Alphabet Soup of Opportunity
Business travel payments solutions provider AirPlus International is also exploring several different ways technology can enhance the corporate travel experience. According to Peter Kane, North America marketing communications manager for AirPlus, the company is preparing a mobile wallet offering in Germany with its partner, Deutsche Telekom. The wallet would utilize near field communication (commonly known as NFC) to connect the card data stored in the phone to the point of sale system at the merchant.
“The concept of the mobile wallet is to store payment data from various cards in one place, allowing the buyer to choose which card she wants to use depending on the transaction,” he adds
Further, Kane says another technology AirPlus is offering in key European markets is a single-use virtual payment app, in which travelers can create a one-time credit card number for a very specific transaction – a dinner, for example. “This brings the convenience of the mobile app together with the security of the single-use account number,” Kane says. “Furthermore, travelers can then enhance the data of the transaction to make expense reporting easier and more robust.”
New technologies are also adding value to the corporate travel chain by providing more transparency of spend and more cost and compliance control for the travel manager, Kane notes.
“While a central bill solution is a more traditional model of payment, it does offer benefits to travel managers, including driving bookings via preferred channels and making sure purchases are within policy,” he adds. “The additional data they can provide a travel manager — such as a traveler’s department or project code for the trip — as well as the ability to push reconciled data into both expense and financial systems is another added benefit. Single-use virtual cards offer similar advantages, particularly with hotel bookings.”
At Bank of America, the financial institution is constantly seeking ways to provide value to its corporate customers, says Kevin Phalen, the head of global commercial card and comprehensive payables, and mobile technology is a big part of that.
Bank of America’s corporate clients have become more interested in mobile solutions recently than they had been in past years, he says, because they realize the benefit of being able to collect travel data quickly and move it in a two-way fashion. For example, Phelan says if a CEO is traveling and has already reached 80 percent of the credit limit on his card, Bank of America can go into the data and flag the problem. Then the program administrator can be notified to determine if they want to increase the limit so the CEO doesn’t experience a declined transaction – an especially embarrassing outcome if the CEO is with a client.
“We have teams working on data and data exchange, how the information can be accessed, and how do we get rid of this form factor called plastic and embed it in a mobile device,” Phelan adds.Once More Into the Breach
Where payments are involved, security is always a concern. The data breach that affected Target, Neiman Marcus and other retailers in December certainly brought that point into the headlines. It also brought to the forefront a new debate about the magnetic stripe cards we use in the US. Many commentators, including Target CEO Gregg Steinhafel, claimed that if the US used the EMV card standard the rest of the world does, the breach could have been avoided.
EMV, the global technology standard for credit and debit card payments named after its original developers (Europay, MasterCard and Visa), features cards with embedded microprocessor chips that store and protect encrypted account user data. By contrast the older – and probably more risky – magnetic stripe, “sign and swipe,” card technology has been relegated to use mostly in the US.
Phelan says Bank of America issues EMV cards to all its corporate clients in the US, not just for security purposes, but since so much business travel is international, they want a card compatible with what the rest of the world uses.
But EMV technology alone isn’t a foolproof measure to prevent fraud. Phelan explains that mobile technology and data are an even bigger step forward in this regard. If the bank notices a business traveler’s transactions are outside of a normal pattern, they can send an SMS message asking if this is fraudulent. Mining data can also help prevent fraud after another major breach becomes public.
“We can deliver to our clients real-time data from around the globe,” Phelan adds “When something like the Target breach happens, we can go in and look at the data, and immediately deploy fraud strategies if necessary.”
Mary Miklethun, travel products strategy manager for U.S. Bank Corporate Payment System, said the bank has issued EMV cards to its corporate customers since 2012. She said the bank also uses other tools to help fight fraud.
“Among our most popular is U.S. Bank Payment Analytics, which enables clients to electronically monitor 100 percent of their corporate card transactions to identify misuse and abuse,” she says. “Payment Analytics has been hugely popular ever since we introduced it in 2011. The growth of single-use or ‘virtual’ card accounts also has the potential to make electronic payments safer, since exposure is limited to a specific purpose for a specific period of time.”
AirPlus’ Kane adds that there should also be a focus placed on safe credit card practices.
“First, travelers should treat them as if they were their own, personal cards, checking balances on a daily basis and monitoring for any questionable transactions,” he says. “Another way of better protecting a company is to use alternative methods of payment for travel beyond the traditional corporate card. One is a central bill solution. The account number resides with the agency and is used to book ‘big ticket’ transactions, such as flights. The limited access to the account number significantly reduces fraud.”
Limiting exposure is another way to minimize risk. “Not having to put a transaction valued at hundreds or thousands of dollars on an individual corporate card means that travelers can carry a much smaller limit, further reducing exposure to potential fraud,” Kane explains.
Incorporating mobile technology into corporate payments can help security even more, Kane notes, due to the layers of protection that can be put between the user and the card information. For example, a traveler may need to enter one pass code to access the phone and a second to access the app or wallet.Image of Efficiency
The use of imaging in corporate travel is also helping companies drive efficiencies and become more paperless. Harmeet Soin, Americas product management executive for Bank of America Merrill Lynch says receipt imaging makes things easier for the cardholder and the back end program administrator. BofAML offers a service for its corporate clients who use Concur for an expense management solution where a traveler can take a picture of a business expense receipt with his or her smartphone and automatically upload it to the Concur system at their company. Soin says using this method, the information can be had by the program manager mere seconds after the purchase was made.
“The main goal is, how do you make things easier for the cardholder and the administrator on the back end?” notes Soin. “Now the program administrator can get spend information in real time, get it into the system and you get rid of all the paperwork.”
Richard Crum, group head, Global T&E Products & Solutions at Master Card, says these kinds of innovative imaging technologies used in conjunction with mobile devices, have had a “profound change” on expense management and the business travel industry over the last three years or so.
“Expense reporting is a classic pain point and this makes it much simpler for everyone,” he notes. “What once took a team of people can now be done much more efficiently. The card is an ever present aspect of the entire end-to-end ecosystem of managing travel, and can play a role in improving automation.”
Further, Crum notes the quick messaging capability of mobile devices is greatly aiding corporate travel. For example, if a business traveler has a transaction declined, rather than having to make a phone call to an 800 number, they can get an instantaneous message telling them why, along with their options, how to rectify the situation. But Crum also says what we see now is just "the tip of the iceberg" when it comes to mobile payments. Corporate travel and expense programs will continue to embrace these technologies in relation to the corporate cards they issue, he says.
BMO’s Pedersen agrees. “Our corporate card holders are also consumer card holders,” he says. “They are going to want to start using the same technology they’re used to for business as well. It’s a natural stimuli for the industry to provide these capabilities.”
U.S. Bank’s Mikelthun believes next on the horizon for corporate card innovation is the expansion of travel payment programs to include additional types of travelers, like infrequent travelers, contractors, recruits, etc. “The ability to streamline expense allocation and reconciliation for these non-card carrying travelers will allow organizations to capture more travel spend on card,” she explains, “thus extending the benefits of deeper data collection and enhanced efficiency.”