DIGITAL W
ith wide-ranging new regulations, the unremit- ting advance of technology and the looming shadow of
Brexit, 2018 is shaping up to be a pivotal year for the corporate card sector and the wider payments industry. The days when road warriors went on their travels armed with a trusty company card are far from over – 49 per cent of travel buyers saw an increase in the use of physical cards last year, according to a recent industry survey. It’s just that things are getting more complicated, with technology creating a host of new products from virtual cards to mobile payments, and then there are those emerging cryptocurrencies, such as Bitcoin, grabbing plenty of headlines. Most players in the card industry seem
pretty bullish about their immediate pros- pects. The International Monetary Fund (IMF) predicts a strong global economy with robust growth of 3.7 per cent for 2018, which is expected to drive increased spending on corporate cards. Even Brexit does not seem to be putting the sector off its stride. While most institutions have put some provisional
6 BBT CORPORATE CARDS SUPPLEMENT 2018
REVOLUTION
Technology and regulations are pushing through major changes in the way the corporate card sector operates
plans in place, they are also hoping that a transitional period can be agreed between the UK and EU in the next few months “to give the industry time to adapt”.
NEW REGULATIONS Brexit may dominate the UK’s political scene, but it’s EU legislation that is con- tinuing to shape a new landscape for the payments industry. One major regulation that took effect in the UK in January is the Payment Services Directive 2 (PSD2). This wide-ranging directive has three
key aims: to increase consumer rights by standardising payments across the EU, including the abolition of consumer card surcharges; to enhance payment security by improving customer authentication; and to open up the payments sector to new services and competitors. “What PSD2 does, at its core, is enable
the payments landscape across Europe to continue to evolve and meet the changing ways people pay, while ensuring security, trust and ease is paramount,” says Ann Cairns, president, international, at Mas- tercard. “This transformation is opening up new possibilities for business and consumers through technologies such
as contactless, biometrics (fingerprint or face recognition) or encryption.” One of the most talked about areas of PSD2 is the ban on suppliers levying credit and debit card surcharges on consumers – a practice that some travel companies, most notably low-cost air- lines, have long been criticised for. This move primarily affects the leisure
travel market because corporate cards are excluded from the surcharge ban. However, there is room for confusion because the surcharge ban still applies to business travellers using personal cards when paying for travel services. With PSD2 having only recently been
introduced, the impact is unclear. Fabi- enne Cauli, general manager, global client group international, at American Express, says: “PSD2 came into force in January. It is therefore still too early to gauge its overall impact. There are a number of key elements which have yet to come into effect – notably the requirements on strong customer authentication and changes which could come through the introduction of third-party provider rules.” An earlier piece of EU legislation – the cap on interchange fees for cards (0.2 per
In association with
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