see whether there is an option to renegotiate,” says Amex’s Salt. If the content from the incumbent card programme is embedded into an expense management system (EMS) – whether it be a lodge card with a travel agent, a purchasing card within the organisation or individual cards – it will cost a lot to switch it and then re-educate people on the new solution. There is no point in throwing the baby out with the bathwater. “How many cards there are is critical,” says
director of product for HRG UK, Brian Merry. “If you have a £5 million spend and want 500 cards, that is less profitable for the card company than a £5 million spend and 50 cards. What is spent on those cards? How much of the spend is outside the country of issue? The card companies make more on foreign transactions than on domestic. Give as much information as possible.”
DECIDE WHETHER YOU ARE LOOKING FOR CARDS TO BE ISSUED NATIONALLY, IN SEVERAL COUNTRIES, OR GLOBALLY With a global programme, check that your supplier has widespread acceptance. Consider where most of your cardholders are travelling – if they are largely doing business in the eurozone, then you would best benefit from a euro card. Ask whether the supplier has a presence in the areas where you need a local currency card and, if not, if they have a partner there. “There are few card issuing organisations that
have the capacity to cover all 200-plus territories around the world unless there is a local partner,” says MasterCard Europe’s head of large market commercial products, Rene Stynen. “Try to find an 80/20 rule – find the 80 per cent that gets you the immediate big benefit of the card programme and maybe find local solutions for the remaining 20 per cent that feed into the global programme.” When it comes to who settles the bill, there is a dichotomy. The options are: centrally, by the company; or individually, by the cardholder. Card companies would generally want centrally-settled because it is less labour intensive for them,
In association with
EVERY CARD COMPANY CHARGES AN ANNUAL SUBSCRIPTION for a corporate card. However, provided your requirements are of a reasonable size and every card is going to incur regular spend, those fees are generally waived. However, if you maintain dormant cards, or cards with very little spend per year on them, the card company could impose fees to help cover the cost of maintaining those cards. Supply the card company with detailed information to include total anticipated revenue: how many cards will be required, the percentage of spend that will be outside of country of issue, whether the cards will be centrally or individually settled, anticipated days of credit required, and whether a travel lodged account (or lodge card) is needed. This information will allow the card issuer to calculate its profit generation and, from that, whether it can pay a volume rebate. A rebate will not be calculated on your total spend or number of cards alone. If your spend make-up is insufficient for a formal volume rebate
agreement, it may be possible to negotiate a reduction in the foreign transactions conversions rate – a transaction out of domain currency of issue is more profitable than a domestic transaction because of the profit from the currency conversion rate. But don’t be tempted to negotiate both: the lowering of the conversion rate lowers the provider’s profitability and, therefore, diminishes the opportunity for a rebate.
whereas Brian Merry recommends individually settled, especially where the client does not have an expense management programme. This provides an inherent incentive for
cardholders to put in their expenses regularly, so that they are reimbursed before the bill’s payment date – and they cannot claim for any personal expenditure. But where payment is handled centrally, the cardholder has little motivation to pay back the company quickly for personal items that have found their way on to the corporate card. “This happens a lot and policy needs to be very disciplined,” says Merry. Attached to this is insurance liability, whether
corporate, joint and several (part corporate, part individual), or individual. The majority of cards are centrally settled and that is typically accompanied by corporate, or joint and several liability. The advantage of this option is that the individual can still be held responsible for any personal spend on the card, even after the company has paid the bill.
DATA IS KING For greatest efficiencies you need to know whether a card company can upload information into an EMS – not all