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The commercial card blueprint:


unlocking the benefits Five major industries covered


Consumer and healthcare


Energy, power and chemicals


Industrials


Financial services Technology, media and telecoms


Between them, the companies surveyed had a total of


164,000 US$ 1.8 billion


commercial cards in circulation globally,


with a total annual spend of


across 35markets and in 22 currencies


GLOBALISATION AND CHANGING BUSINESS TRENDS have had a significant impact on the volume of travel and entertainment (T&E) expenses, as well as business-to-business (B2B) payments. Interestingly, as many corporates focus on trimming costs due to economic pressures, there is still steady growth in the commercial card industry. Capgemini estimates that global commercial card payments reached US$1.8 trillion in 2015, up from US$1.4 trillion in 2013. To identify key trends, Citi undertook a study of select commercial card programmes, representing US$1.8 billion of spend across five industries, 35 different countries, 22 currencies and 164,000 commercial cards. The findings from the study hinted at a blueprint for unlocking the crucial benefits – with respect to convenience, efficiency and control – of a commercial card programme. In short, a best-in-class programme should be globally compliant, centralised and digital.


A global compliance framework is essential


The study demonstrated that underpinning the success of any programme is a strict and effective compliance framework, which ensures that cards are used appropriately, reducing the chance of fraud and facilitating a holistic oversight of spend.


As such, the majority of companies have commercial card procedures in place, with 84 percent of companies surveyed by Citi mandating employees to use


commercial cards and 74 percent ensuring that programme administrators receive training on best practice.


In terms of declines, which are another significant cause of incomplete data, Citi’s analysis shows that transactions are most often declined due to cardholder error, whether this is due to cardholders exceeding their credit limit (the reason for 15 percent of card declines), exceeding their cash withdrawal limit (8 percent of declines) or keying the incorrect expiry date (8 percent of declines). As such, most declines are within the company and cardholder’s control and can therefore be avoided.


The answer is to benchmark performance against certain metrics and use management information systems in order to understand the reasons for declines and develop plans to address them.


Advances in technology should also help


reduce the number of declines: SMS alerts regarding remaining credit can give cardholders advanced notice of when they are approaching their card limit, for instance. Compliance remains an ongoing task and one that companies are expecting providers to help them address with even greater force and focus in the future, through elements such as online training modules or best-practice webinars.


Every successful programme needs centralisation


By mandating global compliance, it makes sense for a commercial card programme to be aligned across regions. Of course, every successful programme naturally also needs centralisation.


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