allowed airlines and other suppliers to continue to charge higher levels of surcharges.


BREXIT IMPACT While EU legislation continues to be implemented, everybody knows Brexit is coming. Like many businesses, most corporate card companies are adopting a “wait and see” approach and have urged the UK government and EU to deal with Brexit in a “phased” approach. Trade association Payments UK says that the impact on the payments industry “will vary significantly” depending on what type of deal is reached between the UK and other 27 EU member countries.


negotiations will undoubtedly have an impact on business travel spend and the location of many large corporations.” American Express says that it is “identifying any changes that might be necessary to ensure stability and business continuity” as the Brexit process continues. “We believe it is important for business to be able to make long-term plans, so we support a phased implementation of Brexit to give industry time to adapt,” says Amex’s Penney. Like almost everything connected


with Brexit, there are more questions than answers so far. But this fog should at least start to lift in the next year as EU-UK negotiations proceed.


“It needs to be recognised that there’s been a revolution in the way we make payments across the EU over the past decade, and this pace of change is only speeding up”


Key issues revolve around whether UK-based card companies will con- tinue to have access to pan-European payment systems and have the ability to offer services across the EU as part of the “passporting” policy. These elements are seen as being crucial in offering UK customers more choice and competition in payment options. A loss of access could also ultimately lead to higher fees for corporate clients. A Payments UK report on Brexit states: ”During the negotiation, it needs to be recognised that there has been a revolution in the way we make payments across the EU over the past decade, and this pace of change is only speeding up.” Payments UK has called for “open communication” between the industry, government and regulators to “ensure the best possible outcome for custom- ers and the UK more generally”. Airplus’s Haywood says: “The UK


government has made it very clear to the industry that all the existing EU reg- ulations will be maintained in the event of Brexit and that new and upcoming regulations are also likely to be adopted by the UK to ensure uniformity across the European market.” She adds the


In association with BBT CORPORATE CARDS SUPPLEMENT 2017 07


INTERCHANGE FEES An earlier piece of EU legislation – the capping of interchange fees, which came into effect in December 2015 – is still playing out within the payment sector. These caps, which are set at 0.2 per cent for debit cards and 0.3 per cent for credit cards, apply to individually billed accounts. For providers, the cap means lower profits or introducing fees, so individual pay can now be a more expensive option for custom- ers – causing some to move towards


centralised accounts through use of lodge cards or virtual accounts instead of individual cards. “With the capping of interchange


rates by the EU, the pre-existing pricing models for individual payment programmes are no longer viable for major providers, leading to many closing down their individual payment programmes,” says Airplus’s Haywood. She says concerns include reduction of competition, confusion for buyers, inconsistent adoption of the regulation, and financial pressure on corporate card issuers stifling innovation. Barclaycard’s Parpou says the impact of the interchange rate cap on the corporate card market has yet to fully play out. “Corporates are still looking for individually billed solutions but, at the same time, they don’t want to incur a fee for that provision,” she adds. “Cor- porates with a global card programme may find this challenging as legislation varies by geography.” But it’s not just the interchange rules


that are driving the move to centralised accounts. They also have other practi- cal benefits, such as enabling remote approval processes and capturing valu- able management information (MI) data. Diners Club marketing director Adrian Steele says clients are moving to corporate pay for a range of reasons, including policy and governance, and better insight and monitoring.


LATEST TRENDS While impending regulations and Brexit have created some uncertainty within the corporate card sector, there is one constant that is not about to


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