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“Citi estimates that the potential card-able spend for government and corporates in the UAE alone is around $53 billion, of which just $3 billion is currently spent on cards,”
Steve Donovan, Regional Executive at Citi Transaction Services
Complete flexibility For organisations considering commercial cards, the range of products can seem daunting. However, commercial cards can be tailored to clients’ specific needs, minimising complexity while delivering the same efficiency, visibility and control benefits. For example, Monsanto, which had commercial cards for travelling employees in many EMEA countries, wanted local currency cards in Pakistan but had tried and rejected several card products. “The Citi commercial card out-shone the others because of its uncomplicated mechanics, its complete integration with our IT systems, its sharing of controls with our management and its provision of round-the- clock comprehensive administrative support,” explains Javed Murtaza, Country Finance Lead at Monsanto in Pakistan. “Citi commercial cards offer a reliable, dedicated, hassle- free and tailor-made service that matches our working philosophy.”
banks’ card products. While hybrid cards are issued to employees they offer few benefits to corporates. Equally, many genuine commercial cards have no local currency offering, making the card redundant for much of a company’s spend (and generating incremental FX costs). Companies must also
consider card providers’ additional functionality, support and integration. “Citi’s Global Card Management System was a fundamental differentiator when choosing a provider for corporate credit and purchase cards,” says Toby
Shore, Corporate Treasurer and Chief Risk Officer at Dubai Aluminium. “It delivers the flexibility, control and visibility we require to effectively manage our card programme.” In addition to the Global
Card Management System, which enables account- level online management, Citi offers Citibank Custom Reporting System (CCRS), which captures and manages expense information related to card transactions. The solution facilitates reconciliation by including detailed travel booking information alongside financial information.
Virtual card accounts While the use of T&E and procurement commercial cards is increasing in ME, virtual card accounts are also generating interest, especially in the travel supply chain. Virtual cards generate unique virtual credit card numbers. These allow client administrators to set spending and controls on each virtual card based on specific requirements. When a supplier uses a virtual number, the transaction flows through the authorisation process like any other credit card payment. Transactions include robust reference data: each is tied to a unique virtual card number and there are 30 customisable data fields to ensure seamless reconciliation. One major B2B ME travel industry wholesaler has used virtual card payments since
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2011 to enable it to meet hotel chains’ demand for a credit card to immediately secure discounted booking rates. Without this ability, suppliers are reliant on post-stay invoicing, which is expensive and inefficient. Now the travel wholesaler can generate single use credit cards to secure bookings on clients’ behalf for specific values, validity dates and suppliers.
A bright future The potential for commercial cards in ME is remarkable. The region is growing rapidly while the uncertain financial environment since 2008 has prompted companies to reassess cash flows and spending and improve efficiency, visibility and control. Meanwhile, central banks and regulators want to reduce cash use to improve national competitiveness and efficiency. “Citi estimates that the
potential card-able spend for government and corporates in the UAE alone is around $53 billion, of which just $3 billion is currently spent on cards,” says Donovan2
.
“The size of the figure is less important than the enormous business travel and other spend benefits that ME organisations can achieve. There is a huge opportunity for companies to improve efficiency, lower costs and take charge of their business travel and other spend in a way that has never been possible before in ME.”
1.Source: Kaiser Analysis using data from OECD (2005), OECD (2009), National Statistics, IMF World Economic Outlook Database, Bank of International Settlements (2011), MasterCard Research & Analysis
2.Sources: National Tourism Agencies, World Travel & Tourism Council, IMF/Intl Financial Statistics & National Tourism Boards.
2
www.buyingbusinesstravel.com
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