The Global Business Travel Association in April revised
upward its 2013 U.S. business travel spending forecast to $268.5 billion,
representing a 5.1 percent rise from 2012.
GBTA said the newer forecast, up from the 4.6 percent
increase projected at the end of 2013, was influenced by improved business and
consumer confidence, stronger corporate profits, increasing job development and
improvements in key export markets. The news is especially welcomed by many
around the industry following a business travel slowdown toward the end of last
year.
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"2012 was
an unusually challenging year," said U.S. Bank travel product manager Mary
Miklethun. "We did see growth in our portfolio, but it was not at the
level we might have anticipated and I think that's consistent with everything I've
seen around business travel in general."
According to GBTA, companies in 2012 postponed investment
decisions until after the U.S. presidential election and the fiscal cliff
debate. Miklethun said initial uncertainty regarding the U.S. federal
government sequester spending cuts, which carried into 2013 before taking
effect March 1, also affected business travel decisions and curtailed
government employee travel.
Despite those economic obstacles, several banks experienced
spending volume increases and issued more corporate cards. "We're seeing
an industry that continues to grow," said Lionel Le Meur, JPMorgan Chase
managing director of commercial cards.
Last year also brought the launch of several products and
services, especially in the mobile space. AirPlus International, Bank of
American Merrill Lynch and Citi each launched such options as mobile wallets,
mobile sites and text alert messaging features.
"When you look back on 2011, mobile was interesting but
with little action. You had mobile providers saying it was the next big thing,"
said Bank of America Merrill Lynch head of global card and comprehensive
payables Kevin Phalen. After investing time to discover exactly what clients needed,
Phalen said BoAML in 2012 "began executing and delivering for our clients
across our product set."
At the same time, several banks continued to provide
chip-and-PIN technology to frequent overseas travelers, and they anticipate the
United States in the coming years will adopt the technology as chip-and-PIN
becomes the standard around the world.
With many customers requesting global solutions, several
issuers took strides to expand existing programs into emerging markets, notably
China and South America. This global proclivity from clients also sparked
several cross-segment partnerships to better fulfill client needs, including
new arrangements between AirPlus and JPMorgan Chase, and between Citi and Hogg
Robinson Group. Meanwhile, to provide global data, streamlined contracts and
local support, Visa last January launched a multinational corporate card
program in partnership with 13 banks, including lead banks ANZ, Barclays, Grupo
BBVA and U.S. Bank.
AirPlus International
AirPlus in 2012 handled €11.4 billion in billed sales, up 10
percent from the year earlier, and grew by 27 percent its operating result to
€38.8 million.
In March 2012 AirPlus partnered with JPMorgan Chase to offer
North America-based multinationals a co-branded global payment solution. "We
work together to serve the international headquarters of U.S. companies,"
said Volker Huber, AirPlus president of the Americas, Asia/Pacific and global
sales. "JPMorgan Chase does the walk-around plastic and we do the lodge."
AirPlus has similar relationships with UBS in Switzerland,
BNP Paribas in France and United Overseas Bank in Hong Kong. Ron DiLeo, who in
June 2012 replaced Richard Crum as CEO of the company's U.S. operations, has
been responsible for building a team to focus on the JPMorgan Chase
partnership, said Huber.
AirPlus also is focusing on global growth by evolving its
business in China, expanding into Australia, moving "aggressively to
Mexico" and planning "to add Turkey this year or the beginning of
next year," Huber said. "India, Brazil, Chile and Peru we have on top
of our agenda for the next two years. India is very complex, but we think we
can be very successful there. We will again be the first movers in these
countries."
AirPlus also is investing in its mobile strategy. The
company in April began piloting in Germany and the United Kingdom its AIDA
Mobile Wallet, which will allow companies to issue single-use accounts directly
to an employee's iPhone.
"[Mobile] has really been driving us the last couple of
years and makes us wonder where the credit card industry will be five years
from now," Huber said. "Will we really still have a plastic credit
card in our hands—or will it be done differently?"
American Express
American Express last year launched several new products and
enhanced existing programs. In June 2012, the company introduced a digital
payment service, Payve, aimed at large and midsize companies. Payve provides a
centralized electronic platform for making payments through various means,
including checks, automated clearing house, international wire transfers or
Amex's Buyer Initiated Payments solution.
The card company also upgraded the capabilities of the
business travel account to provide improved transaction querying and faster
reporting. Amex updated the platform on its mobile travel solution Mobilextend
and launched AX Connect Location & Communication, a tool that helps client
companies uphold their duty of care in case of emergencies.
"We continue to see many growth opportunities as new
technologies drive the migration of global payment from cash and checks towards
plastic and digital transactions," according to CEO Kenneth Chenault.
BMO
For BMO, 2012 was not a year for launching new products, but
more about the "clean up and refinement of existing core products,"
said senior manager of T&E products Alan Docherty.
The bank continued to focus on integrating the Diners Club
business—purchased from Citi in 2009—by "better defining our products and
figuring out where everything aligns, make the products crisper and work on the
overlap," Docherty explained.
BMO also was focused on its bid, in partnership with Hogg
Robinson Group, to provide the government of Canada a travel, payment and
expense management program, Docherty said. After nearly four years of requests
for proposals and negotiations, the Canadian government ultimately chose the
bank and TMC for the deal, worth up to C$700 million (US$688 million) in
absolute spending per year.
Going forward, Docherty said competition in the space will
get "tighter and tighter." The bank will continue to watch technology
advancements in the sector, including chip-and-PIN card expansion in the United
States. While Docherty said mobile also is on the radar, BMO currently has no
such products and services. "It's something that's on our road map,
something we're looking at, but nothing concrete today."
Bank of America
Merrill Lynch
"Global, global, global," said Bank of America
Merrill Lynch's Phalen. "The expectation from our clients is whatever we
develop, we need to do it on a global basis."
To provide global solutions for customers, BoAML in the past
four years has invested $1.2 billion in its global transactions services
department, where corporate cards reside. This includes investing in mobile
services and enhancing chip-and-PIN capabilities by allowing cardholders to
access their PIN online. ?
Specifically, BoAML in 2012 made its proprietary online
management tool, Works, accessible via mobile devices. That includes global
reporting and account management services available on iPads and balances and
alerts delivered by text message for prepaid cardholders. The testing of a
payment option through quick response codes also is underway.
Through a partnership with Concur, the bank last year
launched mobile receipt capture for its expense management tool and, after
partnering with Paydiant, began offering a mobile wallet. Phalen said BoAML
doesn't yet offer near field communication functionality, but that may be in
the works for this year.
In 2012, BoAML also launched its exact match payment
program, which offers 100 percent auto-reconciliation on supplier-initiated
programs.
"In late 2011 and early 2012, we took the [accounts
payable] automation capabilities that are so predominant in North America and launched
similar capabilities throughout Europe," Phalen said. "As we move
forward into 2013 and 2014, we're launching new products in Asia and Latin
America, and we also expect our AP solutions to take a greater stage around the
globe than they've historically been."
Citi
"One of the things we focused quite extensively on in
2012 and onwards, was to continue our pace of expanding our business into
markets where our clients are expanding themselves," said Citi global
commercial card head Manish Kohli. "As we go into 2013 we are continuing
down that path again."
Citi during 2012 rolled out card programs in China, Africa
and the Middle East. Total commercial account volume rose to $30 billion, up
from $27 billion last year.
The bank also focused on its digital strategy by taking
various functions of Citi's interface and making them electronic and
mobile-enabled. For example, it launched global alerts in more than 66
countries to notify clients when, for example, high-value transactions take
place or statements are due. Citi piloted a mobile-optimized website and began
a full commercial rollout this year.
"The entire capabilities of our online channel are now
available through a handheld device and in local languages for cardholders,"
Kohli said.
The bank also looked at creating new B-to-B flows by taking
card platform capabilities and moving them to such other sectors as retail
travel and the meetings and events space, Kohli said.
Additionally, Citi initiated several measures to help
clients better leverage data to support their efficiency objectives. For
example, it launched Program Audit Tool in early 2012, which allows
corporations to set compliance rules and receive alerts when employees fail to
comply with company policy.
"We looked at the data we already capture and looked at
trying to make it more meaningful to clients," Kohli said.
The bank in November 2012 announced a partnership with Hogg
Robinson Group to help clients improve data integration between their travel
management companies and card providers.
"Increasingly, the industry is going to recognize that
one single provider can't do everything," Kohli said. "To bring more
consolidated offerings, we will see more partnerships and more synergy
opportunities, not just with expense, travel management and card providers, but
also with other niche technology integrators."
JPMorgan Chase
As issuers look to expand globally, it becomes challenging
to offer one solution that works across international markets. Providing global
reach without diluting customer service and the local knowledge and the
expertise is not easily accomplished.
"[Banks] can adopt a one-size-fits-all approach, but it
breaks down very quickly when you go into local implementation," said
JPMorgan Chase's Le Meur.
That's why the partnership with AirPlus was a good decision
for the bank, he said. "What we're providing is a different way to
maintain local services and expertise from leading providers in those markets
through AirPlus and bank partners, where they can provide the backbone and tech
to roll out the data and provide global visibility and global management
through reporting," he explained.
Overall, he said the bank has seen continued growth, which
is driven by trade and globalization, which in turn spurs the need for clients
to continue to travel.
MasterCard Worldwide
"[In 2012] we grew at the highest rate for the emerging
regions," said group head of global travel and entertainment products and
solutions Richard Crum, who in early 2012 joined the card company from AirPlus
International. Specifically, MasterCard experienced rapid growth in
Asia/Pacific, the Middle East, Africa and Latin America—particularly in Brazil.
Another major development was an update for the company's
Smart Data products, which include expense reporting and management tools
targeted for small and mid-size companies. The enhancements included upgrading
the user interface for its Smartdata.gen2 platform, relaunching reporting
capabilities and adding a new analytics module.
MasterCard also updated its Global Data Repository system,
which captures and distributes carbon footprint scores, and created a mobile
receipt capture tool.
MasterCard launched two additional applications targeted to
midmarket customers, Business Controller and Business Network. The latter is
powered by Rearden Commerce and offers an integrated site to perform such tasks
as booking travel, managing expenses and purchasing supplies.
Business Controller allows clients to set controls on
spending and merchant limits, and receive alerts through email or text when
employees surpass limits.
"Small and midsize businesses don't have teams of
people to manage programs, so we worked to put out a suite of solutions that
helps them do it," Crum said.
MasterCard also has been investing in mobile technology and
this year launched a mobile wallet, MasterPass.
U.S. Bank
While U.S. Bank experienced portfolio growth—notably in
Canada, which experienced a 9.1 percent increase—"it wasn't at the level
we might have anticipated," said Miklethun.
The number of global T&E accounts U.S. Bank served in
2012 rose to 2,567 from 2,322, while the number of cards issued globally in
2012 declined about 3 percent to 829,000.
"We're not yet seeing corporate managers loosening the
strings on their wallets," Miklethun said. "We're optimistic for
later this year and moving into 2014, but looking at our portfolio and how it
compares to the industry, it doesn't feel like we're quite back to normal."
After launching card programs in Europe in 2011, Miklethun
said the bank continued to expand its global programs during 2012. It currently
issues cards in about 15 to 20 European markets with plans to add six more this
year, as well as local currency issuance in Norway, Denmark, Sweden, Czech
Republic, Poland and Hungary.
Since launching chip-and-PIN cards in 2011, U.S. Bank said
about 30 percent of its corporate clients have issued them to select
cardholders, representing about 5 percent of the total number of cardholders
across the portfolio.
In 2012, U.S. Bank also partnered with global distribution
system operator Sabre and U.K.-based Conferma to offer a new payment
reconciliation tool for hotel bookings. The bank has about six clients using
VirtualPay and is in discussion with a couple dozen more. Miklethun said the
bank in 2013 will look for partners to build similar integration for air travel
bookings.
Universal Air Travel
Plan
UATP in 2011 launched its DataStream billing system and DataMine
transaction portal, and marketing and communications vice president Wendy Ward
said growth for those products took off last year. In 2012 UATP added five new
clients for a total of seven, including Aeromexico, APG WorldConnect, Malaysia
Airlines, Qatar and an unidentified customer. It also added WestJet as a new
merchant.
Charge volume in 2012 increased to $13 billion, up from $12
billion the previous year. "All our regions are growing and this is due to
expansion of issuers, current issuer growth and our new products, DataStream
and DataMine," said Ward.
UATP also increased to 260 the number of accepting
merchants, up from 250 in 2011. It added as a new processing partner Germany's Wirecard
Technologies, which provides white-label solutions for a voucher program that
will be routed through the UATP network.
UATP last year finished upgrading to a Sita system its
network infrastructure, a process that took several years to accomplish. With
the new system, UATP can more efficiently process mobile, gift card and
single-use card transactions.
"It's not that we couldn't do certain things before, it's
just easier now because the technology is more modern," Ward said. "For
us it's a big deal, as it brought us into the new age."
This report
originally appeared in the May 27, 2013, edition of Business Travel News.