Corp. Card Battle Goes Global

By Mary Ann McNulty

Looking for new markets to tap, corporate card vendors are suddenly turning their sights on the unexplored global marketplace.

American Express, MasterCard, Visa, GE Capital Corporate Card and Carlson Wagonlit are beefing up staffs, plotting strategies and working on new products expected to debut in coming months. The moves are spurred both by corporate interest in truly global payment systems and by the vendors' desire to boost revenues when the majority of U.S.-based corporations have a card program in place. While the moves are expected to further complicate the card selection process, the increased competition is expected to benefit corporations that can leverage their global buying power.

American Express is prompting some action by the card associations with its plans to solicit banks to issue its cards around the globe. Until now, Amex has issued its own cards. While about 40 banks have reportedly discussed the option with Amex, only three international deals have been signed thus far-with French firms Peugeot and Citroen Financement and with Banco de Credito Nacional in Brazil.

Announcing the change in strategy in May, Amex chairman Harvey Golub urged bankers to defy those that would prohibit them from issuing both Visa and American Express cards. At the time, Visa International was considering a bylaw change that would have prohibited any member banks from issuing Amex or Dean Witter Discover cards. The proposal raised the ire of European Community competition officials and prompted the Visa International board to retain its existing bylaws, which allow each region to determine such marketing issues. In the United States, Visa bylaws have prohibited member banks from issuing Amex or Discover cards for the past five years.

In late June, MasterCard's board debated the issue of banning member banks from issuing Amex cards, but decided the issue should be addressed at the regional level. Mirroring Visa's rule, the United States board decided to prohibit its members from issuing Amex and Discover cards so as not to "diminish the MasterCard brand."

Along with the steps to expand its logo, Amex sales reps are striving to develop products and services that global corporations need, said Jud Linville, senior vice president and general manager of New York-based American Express Corporate Services.

"We're beefing up our global efforts," Linville said. "Over the next nine months, aside from MIS and smart cards, the other theme is global." One of the services Amex expects to launch soon is global spending-limit capabilities to allow corporate executives to set limits by traveler or type of merchant establishment on a global basis.

Part of the emphasis on global services is being dictated by corporations that are signing worldwide air, hotel and car rental deals and need the global card data for negotiations, Linville said.

In its ongoing battle with American Express, San Francisco-based Visa announced plans to launch cross-border corporate cards this fall. Trying to compete with an increasingly aggressive American Express, Visa International recently changed its bylaws to allow member banks in Europe to issue cards across country borders. Previously, regional association bylaws prohibited banks from issuing cards outside a specific territory.

MasterCard International, based in Purchase, N.Y., is beefing up its resources to "export the success" of its U.S. corporate and purchasing card programs across international boundaries.

It recently hired Jason Rodgers, formerly of Visa, as senior vice president of global acceptance relations; Robert Wesley, formerly charged with American Express' smart card efforts and international business developments, as senior vice president of global product management and development; and Alan Brown, formerly with First Bank, as vice president of global corporate products.

On the purchasing card side, executives expect to export the card to Canada, Australia and Brazil and announce new product offerings this summer.

One MasterCard issuer, GE Capital, Salt Lake City, is working on its own plans to service customers' global needs by buying banks around the globe through which it will issue corporate cards.

GE Capital already issues cards in three currencies-U.S. dollars, British sterling and Irish punt-but intends an aggressive rollout of several others by year-end, according to Mike Mooney, director of global payment systems.

Payment system newcomer Carlson Wagonlit Travel is looking for banking partners around the globe. Carlson has signed Household International of Salinas, Calif., to issue corporate MasterCards in the United States, Canada and the United Kingdom said Ed Surko, director of Carlson's global payment systems division. Over the past two years, Carlson has developed a database that will create the reporting necessary for corporations. Banking partners will issue statements to cardholders, Surko said, and send daily data feeds on charges to Carlson to process and relay to corporate clients.