SURGERY Plastic
Users of corporate cards in the UK number in their millions, says Colin Ellson, who examines how our 'flexible friends' can work wonders for a company's bottom line
THE charge card has steamrollered its way into consumer consciousness since the first was issued more than 60 years ago, with the market evolving to include debit and credit cards, corporate and lodge cards, the latter two designed for the business user. How many pieces of plastic are circulating
out there is well nigh impossible to pin down. But in the UK, there are an estimated three million users of AirPlus, Barclaycard and American Express corporate cards, and already more than 500,000 business customers hold a wallet-size key to expense management in the emerging Chinese market. An idea of the size of the overall sector is
that in the US alone, customers dig out one billion versions of what was once termed “your flexible friend”, using their credit or debit facility to pay for everything from groceries to a rocking chair for the porch. Back this side of the Atlantic, a recent
Warwick Business School study concluded that business credit cards are the most widely used financing tool for small- and medium-sized companies. SMEs spend over £1.8billion on them every month, according to the findings of the survey, sponsored by the Bank of England, the Treasury, employers’ groups and banks.
In essence, the study, among 2,500 companies, found that 55 per cent of SMEs use business credit cards, while 53 per cent operate with overdrafts. Opinions differ, with conflicting results in a survey of the business expense claim process, released this autumn by Spendvision, a global provider of total transaction management solutions. Conducted among 1,000 employees in the public and private sectors in the UK, this revealed that 77 per cent of respondents use their own cash or card to pay for expenses. With a business credit card it doesn’t have
to be that way, according to UK-based
CreditCards.com, which lists four major reasons for using one: additional card holders can be added to the account; each card has its own credit limit; it saves staff using their own money; and companies can benefit from credit card rewards schemes every time an employee uses a corporate card. Most significantly, a card incorporating a management information system helps streamline the payroll process, relieving staff of having to collect receipts and submit a claims form, which is time-consuming and labour intensive in that another employee also has to process it.
Such benefits are well-known to travel management companies like Portman Travel. “We are focused on customer needs and offer clients both payment type advice and a full range of payment methods best suited to their product mix and process requirements,” says VP of account management, Johan Persson. In a proactive industry that prides itself on initiatives to help the client – although the past year has been more about consolidation than innovation – Portman recently forged a partnership with FairFX, a prepaid card and expenses platform. Persson says: “This perfectly complements
our clients’ travel expense management facilities. A secure and accredited card, it offers market-leading exchange rates, no annual fee, and low or no ATM charges, and eliminates the need for cash advances or charge cards.” Meanwhile, corporate cards per se are still
the backbone of T&E management, according to Brian Merry, director of ancillary products for the Hogg Robinson Group (HRG), an industry guru who has helped several issuers design their cards, and gives presentations to card companies, banks and business travellers. “There have been some big developments,”
he says, “like the electronic V card. This is ➔
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