AirPlus
International and JPMorgan Chase will target large corporations with a
co-branded global payment solution, which officials said the firms would
introduce to North America-based multinationals this year. The companies last
week announced a strategic partnership.
Both
AirPlus and JPMorgan Chase intend to offer an "additional choice" to
existing and prospective large customers seeking a global solution. "Those
clients have traditionally looked at one or two suppliers for the global
proposition, believing that those are the only options, and now we're adding
another," said AirPlus International executive marketing director Spencer
Hanlon.
Company
executives have been discussing a relationship for about a year, Hanlon said,
as AirPlus sought a North American banking partner for the next-generation alliance it announced last year. JPMorgan has not committed to being part of
the larger alliance, but it is a possibility.
"We
were looking for a partner in that segment because we're not a bank and
therefore we don't have access to some of the treasury folks who are very
influential in choosing global travel and expense [solutions]," Hanlon
said. "JPMorgan at the same time was looking for a partner that had not
only a deep understanding of the European marketplace but also the global reach
through our bank partner network and our own presence in many markets. We solve
the management information system, lodge and global challenge when trying to
put together this proposition, and JPMorgan very much solves the access to
decision makers and strength of the corporate card proposition in the United
States."
J.P.
Morgan Global Commercial Card claims "more than 6,000 public and private
sector clients and more than 6 million cardholders." The company's
treasury services business serves more than 135,000 corporations, financial
institutions, governments and municipalities in more than 180 countries and
territories.
While
the bank has global reach, JPMorgan Chase corporate card executive and managing
director Lionel Le Meur said it "didn't have a global footprint in all
business lines" and had to decide whether to "build it yourselves or
partner with someone who already has."
"We
found a fantastic fit with AirPlus," said Le Meur, who joined JPMorgan
Chase in 2010 after more than a decade with American Express. "We thought
we could really leap ahead of many of our competitors in providing that
solution to many of our clients. It's a strongly founded partnership based on
where we want to take the product."
Le
Meur said bank executives liked the AirPlus company lodge accounts, MIS and
data reconciliation. "On a worldwide basis, with the AirPlus partnership,
we give access to a really unique set of tools, in particular, MIS," he
said. "We've benchmarked it and in some markets competed against it, and
we believe it's best-in-class in terms of the ability to give the travel
manager an essential point of view with lots of depth and flexibility in
analysis of travel spend." AirPlus Information Manager will serve as the
reporting system for joint customers.
But
data management isn't the only challenge for multinational payment programs, Le
Meur said. Corporations that want to deploy payment solutions globally
"understand that there's a lot of complexity, market by market" and a
need for local service and expertise. "In combination with AirPlus, we're
aiming to make it easier, remove complexity and bring the right balance of
local expertise and global reach," he said.
According
to Hanlon, AirPlus has "very local solutions and people on the ground in
Italy, Austria, Switzerland, China, Australia, the United Kingdom, Germany and
elsewhere, and a deep understanding and experience in global implementation and
contracting."
Central Or Individual Bill
Clients
would have the option to use centrally billed accounts processed through the
"UATP network with a slightly lower interchange than Visa or MasterCard or
individual card accounts" that would process over the Visa or MasterCard
networks at their interchange rates, Le Meur explained. "We're making the
options available to our clients, and they decide."
Use
of centrally billed accounts varies by region, he noted. "In Europe, the
central-billed payment solution is actually the more dominant form of air
travel [payment], especially in Continental Europe. In the U.S.,
individual-billed is the stronger option."
According
to both companies, specifics of the combined product offering will be introduced
"progressively" at industry events, starting in April at an
Association of Corporate Travel Executives conference in San Francisco and
including the Global Business Travel Association convention in Boston in July.
"The focus is on explaining this to existing relationships and
progressively through the year roll out the new product solutions and start to
go to market and talk to prospects," Hanlon said.
Le
Meur added that the focus in coming months will be on client communication,
product development and "technology builds that will allow the product to
come online later in 2012."
For
now, the partners plan to offer in the United States and Canada JPMorgan's
existing MasterCard T&E proposition. In the United Kingdom, the offering
would be the AirPlus-issued MasterCard co-branded with JPMorgan, while in
Germany the partners would offer the AirPlus-issued MasterCard. "Elsewhere
we're working with our bank partners who are on Visa or MasterCard, depending
on issuing choices," Hanlon said. "For example, in Switzerland, it's
the UBS Visa." He noted that the insurance and lounge club access that
AirPlus offers in the United States is part of the Wright Express product and
not included in the new joint offering.
Existing
JPMorgan Chase clients use MasterCard's smartdata.gen2 reporting platform.
Client card program managers use the bank's PaymentNet platform for online
management of all cards in their programs.
"We're
looking at the joint product roadmap," Hanlon said. "Once we've
implemented the first round of collaboration, we would be looking to bring the
strengths of both parties."
Both
companies also plan to continue selling existing products individually,
according to officials from both firms. For the joint offering, a "client
needs to be of a certain size with an international program and desire to
source a single-solution option," Hanlon said. Le Meur said the partners
had no minimum number of countries for participation and the solution could
make sense in a single market.
Long-Term, Exclusive Partnership
Hanlon
said AirPlus doesn't "expect to sign any additional banking partnerships
in either the United States or Canada. This is a long-term proposition, and
both partners are investing in connectivity, product, collaboration and sales force
alignment."
While
neither company detailed the size of the investment or the number of new hires,
both said their commitments include additional sales, request-for-proposal
support, technical sales and account management personnel.
"This
is not just a referral relationship," Le Meur said. "We're aligning
our resources to operationalize what is in the agreement. It's a significant
investment on both sides to integrate our services so that from the client's
point of view it is a one-touch view."
Other Bank Partnerships
JPMorgan
Chase also has bank partners in Latin America and Asia, and a "network of
alliance banks that issue cards for us where we don't have the ability to issue
ourselves," Le Meur said.
AirPlus
currently has 16 banking partners around the globe, Hanlon said. "The
NextGen partnership is the next level where we come together more closely to
make sure that all of our products and services are collectively at the same
level, the contracting process is much easier and that each bank has the capability
to sell the NextGen proposition off-the-shelf to their own corporate banking
clients," he continued. "The expectation is that JPMorgan will in
time join NextGen, but first we have to deliver what we set out to
deliver."
The
AirPlus NextGen alliance was formed with BNP Paribas of France; Nordea in the
Nordic region; Santander of Spain, Portugal and Latin America; and UBS in
Switzerland.