Marcie Verdin
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 The Transnational'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 increases?
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 globe?
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 concerns there.
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 nirvana. 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? The article originally was published in Business Travel News.