GLOBAL ACCESS
I
n days of yore (before Facebook or One Direction), European travellers visiting exotic lands would pay their way locally with a variety
of artefacts, ranging from gold ingots to glass beads. These days, in established economies at least, a corporate card will usually do the trick – but perhaps a more pertinent question to consider is how business travellers based in the world’s emerging nations pay expenses when they hit the road. Data for the global corporate payment market is frustratingly meagre, but if the better- researched consumer market is any guide, then the answer is that emerging economies are also turning to cards, too. According to market researcher Euromonitor, North America and Western Europe accounted for 56 per cent of the US$13.8 trillion consumer card market in 2012, but these two regions also showed the slowest growth. Euromonitor forecasts that the amount of money put through cards in Asia Pacific will exceed the figure for North America by 2017.
UPWARD TRAJECTORY Anecdotally, it would appear that corporate payments are also on a steep upward trajectory. “There is significant growth outside the two
traditional regions [North America and Western Europe],” says Rene Stynen, head of corporate payment solutions at Mastercard Worldwide. He attributes the increase to heightened competition between global card issuers and a natural expansion by multinational companies of their card progammes as they attempt to extend customary travel management and financial processes to their newer territories. Steve Robson, head of commercial
cards EMEA for Citi, agrees. His bank now issues in local language and currency in 67 countries worldwide,
The amount of money put through cards in Asia Pacific will exceed the figure for North America by 2017
responding to intensifying demand for global coverage from corporate clients. “They may currently be dealing with a lot of cash advances or paying through individual consumer cards in those markets,” says Robson. “It is hard to exert control within an expense policy like that, and companies certainly aren’t getting any consolidated spend information.” He adds that it is not only employers clamouring for change. So, too, are many employees. “They want their
spend to be within the company cashflow, not their own,” he says. Despite these compelling reasons
to extend a card programme globally, travel managers and their colleagues will not find themselves pushing against a completely open door. As in the West, Robson also admits some employees are resistant, since not everyone welcomes the transparency that comes with documented card payments. Paradoxically, some employers are reluctant to issue cards because they fear the opposite: that giving employees plastic will encourage profligate spending. For that reason, argues Stynen, corporate customers often prefer to start with lodge cards in emerging markets. Similarly, Diners Club executive
vice-president Tom Edgerton sees lodge cards used extensively in Asia, “where the need to consolidate all air spend for companies is critical”. He says that outside Europe, Diners Club’s largest markets for lodge card programmes are Japan, Australia, Brazil, Colombia, the UAE and Singapore (see ‘Regional Spotlight’, below).
MANAGEMENT PROCESSES A fundamental problem is that there is little point introducing a card in isolation. Companies know from lengthy experience in the West that cards need to be part of a fully structured travel and
big items through a lodge account, and there may be reasons why they are unwilling to give local employees a card,” she says.
ASIA PACIFIC Business people are frequently warned not to make the mistake of assuming one market in Asia Pacific is the same as another. The region is larger, more populous and more diverse linguistically, culturally and economically than Europe, making any sort of generalisation impossible.
In association with
As an example of the danger of resorting to stereotypes, Airplus International Asia Pacific region director Christian Gall points out that Australia is one of the most mature card markets in the world. “In fact, it has gone further than the EU in terms of transparency,” he says. When Australian merchants
accept payment by card, Gall says, they are required to itemise the merchant fee (the fee the merchant pays to the card issuer) as well as any surcharge the merchant has imposed.
Mature as it is, the Australian
card market continues to evolve. Amex reports strong growth in recent months in non-travel and entertainment expenditure through corporate cards. “High interest rates means businesses are looking for effective working capital solutions,” says Gillies. Another mature market in the region is Singapore. “There is a full set of competitors, both Western and local,” says Airplus’s Christian Gall. “Singapore is the regional centre for multinational
card issuers.” Australian banks are major players in this market, and another quirk is that several travel agents issue their own branded corporate cards in partnership with financial services companies. Possibly the most idiosyncratic
market of all in Asia Pacific, but also potentially the most important, is China. Regulatory and cultural reasons both play their part. The Chinese government has generally deterred Western payment companies as it builds its state-owned network Union
2013 Buying Business Travel • 29
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