EU ISSUES While the UK’s referendum on June 23 on whether to stay within the EU or leave (the so-called ‘Brexit’) has been dominating British headlines in recent months, the corporate card industry has been scratching its collective head over the impact (or not) of the introduction of capped interchange fees by the EU, which is discussed in detail on p10. On the EU referendum, most cor-
porate card providers are unwilling to put their heads above the parapet when it comes to declaring whether they support remaining in the union or leaving. Some are at least willing to discuss what impact leaving the EU may have on the cards sector. One industry leader says that those banks with their European headquarters in the UK may be forced to establish a new base in another EU country if the UK votes to leave. “Certain benefits in the card world
are the result of there being a har- monised EU, which allows card issuers to use cross-border rules to enable them to issue cards in all the EU countries,” he
explains. “If the
UK suddenly sits outside the EU, it’s quite possible they couldn’t do that any more.” Caroline Haywood, UK manag- ing director of Airplus Interna- tional, says corporate payments are “already globalised and not EU specific”, which means there should not be “a huge change in pro- grammes, card policy or structure” if the UK votes to leave. “The impact of leaving the EU on running a day-to-day corporate card programme would be minimal,” she says. But Haywood adds that the situation
would be “more complicated” for card issuers because it is not clear whether the existing EU regulations that com- panies already comply with would still apply in the aftermath of Brexit.
In association with
“Certain benefits in the card world are the result of there being a harmonised EU, which allows card issuers to use cross-border rules”
“The government would have a huge amount of work to unpick EU law and either keep it in place or create our own policies and legislation,” she says. “Rules would need to be refined and if the UK does leave the EU this will be a long process.”
TECHNOLOGY Corporate card companies are on much less contentious ground when it comes to discussing technology – you’ll find the virtues of virtual cards and mobile products explored on p14, as well as the impact of other new tech-based developments (p20). One of the main factors driving this advance in corporate payment technology is – as in most parts of managed business travel – the influence of the tech-savvy, so-called ‘millennial’ generation (those employees who were born from the early 1980s to around 2000). Alan Gillies is vice-president of UK sales for American Express Global Cor- porate Payments. He says: “One of the biggest, and ongoing, changes is the growing proportion of millennials in the workforce. This is driving change in the usage of corporate cards, and to expec- tations of access to digital and mobile experiences. Today, the business traveller expects seamless payment experiences and flexible solutions that meet their needs, wherever they are.” Mobile is a huge part of the technol-
ogy improvements being introduced by payment companies and this should only
accelerate with the use of smartphones or even wearable technology, such as the Apple Watch, to pay for smaller transactions. Apple Pay has already been launched
in the UK, although most providers say that use by corporate cardholders has been minimal so far – but this trend is only likely to grow with Google’s Android Pay and Samsung Pay, both due to arrive on these shores later this year. But will technology – in all its forms
– eventually sound the death knell for long-established corporate payment practices such as lodge cards or hotel billback services? Opinion is divided but most believe these traditional methods may still have some life left in them. Maria Parpou, Barclaycard’s commer-
cial cards product director, says: “They will undoubtedly continue to decline as the payment technology maturity of the travel management company/supplier embraces the new technologies. But given the sheer breadth and complex- ity of the industry supply chain and the differing corporate cultural approaches, this may be some time away.” Even what seems like the explosive
growth in the use of virtual cards may not mean the end of lodge cards, says Ashwin Joshi, travel and entertainment product manager at Bank of America Merrill Lynch. “Most of the spend seen on virtual cards is for consolidating stra- tegic business travel expenditure that was not previously captured on lodge cards,” says Joshi. “This solidifies our view that virtual cards and lodge cards complement each other, and their usage is driven by the clients’ needs.” The corporate payments industry may be on the cusp of a new digital revolu- tion, but it’s clear that it will take some time to get there. This makes the sector one of the most important to watch within the world of business travel over the next few years.˜
BBT CORPORATE CARDS SUPPLEMENT 2016 9
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