New York - Speaking during an Association of
Corporate Travel Executives global meeting here this week, MasterCard Worldwide
commercial card products group head Marcie Verdin noted the challenges of double-digit
travel volume growth in certain regions around the globe, data consolidation
and transparency, continued efforts to gain full visibility into ancillary fees
and how to harness technology to improve travel management. Later, she spoke to
BTN's Mary Ann McNulty about those
trends. An excerpt follows.
In your presentation, you noted that "despite the recession,
travel is expected to double by 2019," and while the United States still
represents half of the industry's global commercial card spend, Europe drove 50
percent of MasterCard's growth last year and double-digit "growth is
happening in Europe, Asia and Latin America." What is driving such
The pie is changing so solutions we
bring clearly have to be global—we have to think about how to support the
multinational traveler. The increases we're seeing are because there's a huge
under penetration of managed travel. A lot of travel is happening; we just
don't know about it. It's not being captured by a travel agency or on a
corporate card as travel is going on a personal card. Managed programs are
emerging in some markets. Half the increase is probably an increase in travel,
but the other half is an increase in visibility.
Are you seeing growth in the number of card issuers around the
During the recession, banks said,
"I'll only make my numbers if I focus on purchasing cards." Now there
is much more focus on travel and entertainment, too. Now issuers are saying,
"We need to get into this game." In Europe, all the major U.S. banks
are setting up camp in the United Kingdom and going head to head with U.K.
banks on commercial business. One would not think that an American bank could
penetrate U.K. government business, but they are. J.P. Morgan has won several
government accounts. Citibank is bidding on the Australian government business.
The barriers are coming down.
Recent news stories have noted that U,S. cardholders are challenged
to use their credit cards at kiosks and other locales internationally, as U.S.
card issuers still rely on a magnetic strip encoded with the cardholder's name
as an identifier instead of the computer chip-and-pin format adopted in Europe
and other markets. What are you doing about such issues?
We have some issuers who are thinking
about launching pin-and-chip cards for executives who travel internationally.
The other solution is an education campaign, because the reality is that
terminals that exist today can take mag stripes. You can either educate the
travelers or the merchants. It's probably easier to educate the travelers.
But kiosks don't have the slot, so travelers can't use their mag
stripe cards at subway or rail stations, gas stations or other automated
locations. How do travelers pay there?
That's where you have to get cash
advances, find an employee [to swipe the card instead of the kiosk], or where
the pin-and-chip cards that issuers plan to launch later this year will help. I
think there's a lot of hype. The issue is anecdotal at this point, but all you
need is one traveler who can't use their card. Europe converted to pin and chip
in 2006. Canada is just converting now, so there will probably be similar
You talked about data still being an issue for many managed travel
program—the fact that it doesn't match up, corporations don't have visibility
to ancillary fees. What are you doing about those issues?
Ancillary fees represent $23 billion
and are expected to grow to $30 billion. We're working with the Global Business
Travel Association task force and are hopeful that a new carrier to join the
group will push this. All it takes is one airline and one corporation to push
this. But large corporates have to demand this from carriers.
On data consolidation, as good as our
dashboard [powered by TRX] is, travel managers said, "I want to use my
travel agency reports and card data." We launched this travel dashboard,
but the challenge there is that becomes another source. They said, "I
don't want to adopt another solution." We've sold some, but not a lot. The
whole contracting and licensing and resell on the dashboard is the issue. If we
had an app for the dashboard, I think we'd be there. You have to have an
integrated console with an app accessing the data. The data needs to exist with
a dynamic call to the database to cleanse the data and spit it up to you—that's
The data we have is the power, but
how do we get it into the hands of the travel manager to access the
information? That's the barrier. We have the building blocks, but we're just
not there yet, whereas on the consumer side we are. The way we're addressing it
is to partner with guys in [Silicon] Valley and the United Kingdom. We have the
data engine; let's get really good at all the enhanced data and let someone
else write the apps. How do we take our capabilities and partner with some of
the innovative technology providers?