ADVERTISEMENT FEATURE


Alternatively, the cardholder may choose to pay using a personal credit or debit card. This impacts on their personal funds balance and potentially affects their credit rating. Perhaps most importantly, an employee’s use of their own card limits their ability to comply with corporate spend policy. Commercial cards often have merchant restrictions placed on them for compliance reasons; personal cards do not and consequently there is the potential for misuse or non-compliance. A declined corporate card transaction gives rise to further challenges following the transaction as the employee has to submit and reconcile two different types of expenses: their main corporate card-based expenses; and any expenses incurred in cash or on their personal card. By using methods other than a corporate card, the employee also forgoes the opportunity to submit expenses using mobile devices linked to the company’s expense management system. Similarly, in the card provider’s statements system, there will be no single consolidated view of expenses that the employee can view.


CORPORATE EFFICIENCY While the failure of a corporate


card transaction due to non-acceptance is inconvenient, time-consuming and cumbersome for employees, it creates significant costs and inefficiencies for corporates. Most obviously, when employees have chosen to withdraw cash using their commercial cards following non-acceptance,


the company will incur higher costs for a transaction of the same value. The use of a payment method other than


commercial cards also compromises visibility. It means that an employee’s transaction is not contained in the data file feed from the card provider and hence does not appear in the company’s expense management system. As a result, data is less rich and it is harder to achieve a holistic view of company spend. While data associated with the non-commercial card payment will be available elsewhere – perhaps in an accounts payable file – the existence of two different data sets (in different formats and systems) results in reduced visibility. Depending on the billing scenario selected by the organisation, out-of-pocket expenses may lead to multiple payments being made to settle expenses related to a single trip, i.e. one payment to the card provider and another to the employee. This increases processing costs for the company.


Companies often use commercial


card data to analyse spend with specific suppliers. This information is then used in negotiations to try to reduce costs. The absence of some data, because of card non-acceptance, means that the


organisation has a less clear picture of its employees’ spend behaviour and its position in negotiations is therefore reduced. Finally, an important part of a commercial card programme is the financial return it offers an organisation in the form of a rebate. To earn a rebate, card programmes must reach pre-agreed thresholds. Any spend not captured by the commercial card represents leakage and therefore reduces the ability of the company to earn rebate.


SELECTING THE RIGHT PARTNER


Acceptance underpins the success of every commercial card programme. “Only if a card is accepted can cardholders and the corporate gain the anticipated benefits of the solution,” says Robson. “Consequently, it is critical to work with a card provider that uses a card scheme with high levels of acceptance in the market where the card will be used. The breadth of acceptance of the provider is an essential consideration when selecting a partner.”


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36