Business cards: payment on the road to dematerialisation

"By streamlining the travel settlement process, we are saving our customers time and money, while providing them with high-quality data to help them negotiate more effectively with their suppliers.says John Baird Smith, Director of France at Air Plus. In these difficult times, any savings are worthwhile, especially if they are combined with optimised management of business travel. This promise of rationalisation is the credo that the payment solutions and cards industry is singing in unison.

With electronic cards, virtual payments and, soon, contactless payments, the race to the forefront of payment solutions is resolutely following the path of dematerialisation. The promising corollary of this is to limit the time-consuming processing of expense claims and the associated costs, which may not be visible, but are very real. Thanks to all these resources made available to companies, the expenses incurred before and during the trip are ideally converged towards company management software (ERP), through data returned in the ad hoc format, i.e. containing as much information as possible about the business traveller: type of expense, supplier, cost centre, etc. As Stéphanie Laroque, Marketing Director for France and the Netherlands at American Express Business Cards, likes to point out: "Customers agree that the most detailed data is that linked to payment solutions.

This desire to collect 'data', the Holy Grail of the perfect manager, explains the continuing expansion of the use of corporate cards. While the very term 'corporate card' - or business travel account (BTA) - may not be familiar to all business travellers, for several years now these cards have been facilitating transactions between companies, their travel agencies and the travel industry.

Evangelising SMEs

Offered in France by American Express and AirPlus - in partnership with BNP Paribas - as well as by CIC and Diners Club, the concept of the debit card is very simple. Rather than paying for tickets on the invoice, this means of payment is recorded by the agency and integrated directly into the booking process.

Log-in card issuers bear the costs incurred with suppliers before being reimbursed by the company on presentation of a monthly, bi-monthly or weekly invoice, as chosen by the customer. In return, the company will receive a highly detailed report on the travel costs incurred. A win-win solution: "We're taking the financial risk away from travel agents, while companies' accounting departments are gaining in productivity through improved reporting and tax-validated data flows".says John Baird Smith.

While most large companies in France have converted to this solution, medium-sized companies are still in the process of being evangelised. AirPlus is therefore focusing its development on SMEs, opening offices in Lyon and Marseille. Diners Club is also focusing its attention on all those accounts that generate a transaction volume of between €500,000 and €5 million. With two key words: service and flexibility. "At more or less 10%, all the players offer the same thing. It's the quality of the relationship that's important, when the seller understands the buyer's needs and quickly finds the best solutions to solve a problem".says Anthony J. Helbling, General Manager of Diners Club.

The emergence of bric

While the major players are keen to establish their brands among French SMEs, they are also looking to new horizons to develop their activities. Geographic horizons first of all: We were the first to offer a hosted card in China," says John Baird Smith with satisfaction. We started distributing our offer first to major international accounts that had a presence there, and then to local companies like Lenovo. Today, India, Latin America, Mexico and Turkey are all areas that need to be conquered, particularly for the three world leaders in the packaged card market, Citibank, American Express and AirPlus.

However, the advance that will be of most interest to French companies is the acceptance of this means of payment by new suppliers. First developed in the airline sector, the debit card has now been extended to low-cost carriers, as well as the railways - the Air Plus-BNP Paribas debit card and the American Express Business Travel Card account are integrated into the SNCF corporate portal - and more recently to major car hire companies such as Hertz, Avis, Europcar and Sixt.

But today, this means of payment is gradually extending its influence to other areas. "The catering sector is very important in France, and we have entered into a partnership with Business Table, which specialises in online restaurant reservations and meal trays. This means that catering expenses are no longer covered by expense reports, but can be directly integrated into management tools".AirPlus is also looking at taxi companies and visa specialists to accelerate the move towards paperless travel.

However, when it comes to rationalisation, even more than taxis, restaurants or visas, the two major areas of concern for travel managers are hotels and MICE. These are two areas where payment solutions providers are also beginning to support companies' desire for greater control. AirPlus is innovating in this area with the launch of the AirPlus Meeting Card, for example. As well as facilitating the process of paying for meetings and events, this card provides a clear overview of an area that is still unclear to companies.

Focus on hotels and mice

On the hotel side, AirPlus and American Express have strengthened their relationships with these new key intermediaries in hotel reservations, the fast-emerging Hotel Booking Agencies. Their cards are accepted by CDS and Egencia as well as HRS, Hcorpo and iAlbatros. "Accommodation is a complex industry with fragmented players. Rather than dealing directly with hotel groups or establishments, we are turning to online booking centres and agencies to make sense in terms of volume.says Stéphanie Laroque.

However, the lodged card cannot cover all the expenses associated with meetings, seminars and accommodation. The payment industry has therefore come up with a new offer over the last two years: the virtual card. Offered by BNP Paribas and CIC under the name of virtual card, by Société Générale under the name of e-Carte Bleue and by American Express under the name of vPayment, this means of payment takes the form of a virtual bank card number with an expiry date and a visual cryptogram enabling online travel purchases to be processed.

Virtual cards on the rise

"The virtual card is bringing down the last bastions of unmanaged expenditure, particularly in the MICE sector, where these solutions make it easier to pre-pay caterers, for example.says Stéphanie Laroque. Our virtual card is used to book or prepay for hotels and works for all remote payments that accept the Visa card, particularly for budget hotels," explains Laurent Sautré, head of commercial cards at BNP-Paribas. This is in line with the expectations of both reservation centres and travel agencies".. In addition to American Express and AirPlus cards, CDS also accepts American Express and BNP Paribas virtual cards, while iAlbatros has opened up to the American Express dematerialised solution and Btravel to that of CIC.

The virtual card also has another advantage. Unlike stored-value cards, whose transparency for the traveller can lead to excesses and requires safeguards in the form of a strict travel policy, the virtual card has limits built into the way it works. "This is a single-use tool with a priori control of expenditure, guaranteeing greater control than the card itself. In my opinion, this is the product with the most potential for development", says Stéphanie Laroque. However, a certain volume of transactions is needed to make the implementation and configuration of the tool profitable.

While companies benefit from all these paperless payment solutions in terms of greater control over their travel expenditure, the end user is not entirely absent from the considerations of the various stakeholders. "Payment is part of travellers' comfort. Thanks to stored-value or virtual cards, they don't have to worry about paying for their trip before they leave. On the other hand, once they're there, the lack of a suitable means of payment must not be allowed to hold them back.says John Baird Smith.

Extended networks

While everyone has a credit card for personal use, this is far from being the case for business use. However, the usefulness of corporate cards is well established, as they are the ideal mobile assistant for paying for all those roaming expenses such as taxis, restaurants, transport, hotels or withdrawing money abroad.

Here too, acceptance comes into play and can influence the choice of banking partner. While HSBC and LCL offer business cards affiliated to the Visa network, CIC-Crédit Mutuel, Société Générale and, since this year, BNP offer a choice between the two major payment networks. "Visa is very well established in West Africa, while Mastercard is better positioned in Eastern Europe and Russia.says Laurent Sautré.

With their own solutions, separate from these two major global networks, American Express and Diners Club, the historic players in the corporate card market, have over the decades developed a very wide acceptance among the key players in the world of business travel, including airlines, chain hotels and car rental companies. "Our coverage is very broadsays Stéphanie Laroque. For Diners Club, whose history is fully re-launched in Europe, the project is ongoing: We have very wide acceptance in the United States thanks to Discover, the owner of our brand, but also in South America and Asia," says Anthony J. Helbling. We are working to strengthen where our offer was lacking. In the UK, our acceptance rate is 90 % that of VISA and Mastercard, and 72 % in Germany. We will be accepted by 60,000 merchants in France by the end of the year and 100,000 by 2014.

Overcoming shyness

Today, not only corporate payment players but also travel managers are encouraging the deployment of business cards, even for employees who travel on a very occasional basis. Why are companies, especially in France, so shy about distributing corporate cards? First and foremost, there is the fear of abuse. An argument that Laurent Sautré refutes: "For me, this is a rearguard action. Companies have fairly restrictive travel policies to avoid any excesses. And companies are not jointly liable for expenses. The company only reimburses the traveller on the basis of the expense claim, and no more. So there's no risk. From June, BNP will also be launching the 3D Secure option, which sends a dynamic password by text message to secure online payments. This strategy to prevent fraud has also been incorporated into the Société Générale and CIC business cards.

The ceilings included in the business card programmes also act as a barrier to prevent any excesses, with companies free to set limits according to the type of employee - frequent, frequent or occasional traveller - and to define them either over a rolling thirty-day period, or by month, from the 1st to the 30th, a formula appreciated by public sector companies. There are also a number of new features: BNP Paribas has recently introduced a more flexible approach with global ceilings, covering both payments and withdrawals," adds Laurent Sautré. This means that travellers don't have to juggle between the two, and can adapt to local practices. In some countries, cash is king; in others, credit cards take precedence".

With all these advantages, corporate card issuers are playing a two-pronged game, encouraging wider use of this means of payment within multinationals while extending their programmes to SMEs. "We have developed solutions tailored to the needs of large companies and others tailored to the needs of SMEs, with "lighter" reporting, for example.says Laurent Sautré.

In addition to large companies, American Express has also tackled the local market through a co-branded card with Air France, launched in the early 2000s. "Like us, this partner was looking for solutions for this market segment. The main benefit of this card is that it recognises the company's loyalty to Air France, with a discount granted on the volume of annual expenditure," explains Stéphanie Laroque. SMEs want negotiating levers on expenditure that can be substantial".

Privileges for travellers

However, the benefits of business cards are not confined to companies alone: they also extend to cardholders, with insurance and assistance cover or advantages when travelling, such as the automatic upgrades granted to cardholders by a large number of players in the travel industry.

Card publishers are adding privileges to their highly sought-after Gold and Platinum cards. Diners Club offers access to over 500 VIP airport lounges worldwide through its Airport Lounges Diners Club network. American Express does the same with Priority Pass, and BNP will shortly be launching its Access Lounge service. "Even if they have access to the lounge of the airline they are travelling with, some COMEX members or frequent flyers can be more demanding. Depending on the destination, one lounge may be better than another.explains Laurent Sautré.

In terms of benefits, the Corporate card must offer a balance between added value for the company and for the employee," says Stéphanie Laroque. In addition to the corporate loyalty programme, we offer two optional individual loyalty programmes, either Membership Rewards, American Express's own solution, or FlyingBlue as part of the co-branded cards with Air France, which enable points to be accumulated. 50% of our customers opt for this option. Half of our customers have this option". A formula that rewards employee loyalty while serving as a lever to develop card use.