Global communications solutions provider BT Group plc in the coming months plans a massive global consolidation and conversion of its corporate payment platform aimed at balancing local needs for service, reconciliation and financial data with corporate needs for data analysis and leverage.
Publicly traded BT Group as of July 1 agreed to become the first client of AirPlus International's new MasterCard corporate card program, in which AirPlus will serve as the issuer of both ghost and bank cards, rather than partner with a bank for the latter. BT employees in more than 30 countries soon will receive their cards, to be used in conjunction with a centrally billed lodge or ghost card for air, rail or other more expensive travel costs, according to Richard Gous, BT Group treasury manager for banking operations and contractual relationships.
By year-end, BT expects to replace at least 4,000 corporate cards--American Express cards used by employees located outside the United Kingdom and Amex or HSBC bank-issued cards used by those in the United States. Gous said the mix in the United States is "largely because of how we acquired entities in the United States over the past few years." By next February, BT will convert the 32,000 HSBC cards in the United Kingdom to the new AirPlus brand. "In total, we'll probably end up approaching 36,000 to 38,000 cards and could ultimately reach 40,000 cards," Gous said.
[PROFILE_1]Bidding its business, Gous said, BT looked not just for a global payment provider, but one that could help achieve a company goal to "take as much off of employees as possible," through centralized billing and settlement of high ticket charges, such as air and rail, but individual settlement of other charges. "We wanted a centralized settlement program, as much as possible," Gous explained. While other vendors offered central settlement of all charges, "it would have been everything. Particularly in the U.K., there are all sorts of tax rules and compliance issues. AirPlus came to us with a lodge card solution. It's not totally unique, but the way they control and run it, it really did stand out and match up with our strategy."
The process began months ago, as Gous talked to vendors about their global capabilities. BT wasn't keen on the three-way relationship--with GE Money Corporate Payment Systems (acquired by American Express in March) and MasterCard--that AirPlus previously had for its "walking card" offering for individuals.
Gous said AirPlus officials in Frankfurt "mentioned that they were thinking about becoming a direct issuer in more countries, or at least in certain countries. I said that would make things quite interesting because we want everything in one place."
AirPlus sought self-issuance in the United Kingdom to avoid "an awkward situation" that had emerged anytime both AirPlus and GE Money were asked to bid on the same corporate account. "We had a very weird situation because they were our partner, but at the same time they were our competitor," explained Yael Klein, AirPlus International United Kingdom country manager. "We have partnerships with many banks--in Switzerland, France and elsewhere--that are very successful and we wouldn't dream of changing them. The GE partnership ended up not being so very successful."
AirPlus looked for other U.K. banking partners, Klein said, but in the end opted to self-issue the MasterCard in the United Kingdom. "We're doing it very successfully in Germany--we feel the market and need is there."
Even with partners, Klein said, AirPlus has used its sophisticated data warehouse to pull in data feeds and produce consolidated reporting for global customers. "We believe we have the best MIS available. We also believe we have the best admin tool available ... Our most global customer has our solutions in 120 countries," Klein noted. To meet BT's needs for data access and feeds, AirPlus has tested its systems to ensure that they adequately met privacy laws and country requirements.
"Data security in the admin tools is very different. Whereas in Germany a travel manager or administrator has no right whatsoever to see any cardholder data, here in the U.K., [administrators] are literally allowed to see everything," Klein said. Other countries, such as Italy, require that cardholders authorize company access to their individual charges.
"What makes our MIS tool so powerful is that we can actually open it up for some markets and close it down for others," Klein said of data privacy compliance.
AirPlus has adjusted the interface for the United Kingdom and made other minor tweaks, such as allowing cardholders to change their security pins--a frequent request in the United Kingdom, but something rarely done in Germany, she noted. In addition to implementing BT on its self-issued platform, AirPlus by year-end also plans to migrate the 80 global corporate customers that it had on the co-branded GE MasterCard platform, Klein said. Key to BT's payment strategy was a "controlled data warehouse," Gous said. "What I liked with AirPlus is whether they are issuing directly or indirectly though a partner link, they pull data into a central data repository for us. We would gather card data from MasterCard, from some of the partner banks, but, more importantly, we would actually get more of the flown data from AirPlus."
[PULL_1]Within BT, an administrator "looks after the programs" and spending in each country. "But what we never had previously was a view of how our card program looked across the globe," Gous said. "The more we looked at how they would flow our data, how we would access it, we said this is really a good, central, globally controlled program."
During the RFP, BT also considered whether the card program would provide enough benefits for employees. Gous said he operated on the 80/20 rule to try to please most employees. "It was probably the strongest program in terms of giving a really, really good card and control to our individuals that they previously lacked."
Implementation plans call for BT to provide each of its travel management companies--American Express and others around the globe--lodge cards for air billings. Eventually, Gous said, he expects to send pretrip notifications of charges to managers as part of the process. BT considered, but rejected implementing pretrip authorizations of charges, fearing trips wouldn't be approved in time. With pretrip notifications, managers can question charges immediately and sometimes before a trip is actually taken.
Into the data warehouse, BT plans to bring not only the charge data, but also TMC data from American Express, its hotel booking provider and other agencies used, "which will then give us some phenomenally strong management information," Gous said. Data also will feed into the Oracle financial platform to allow managers to see spending by employees and question charges. Approved business charges will be centrally paid by BT, and employees will be responsible for personal charges.
In countries with only a few cards, or where it doesn't make sense to develop the interface to pull data into the accounting system, AirPlus will develop online reports to ease reconciliation for managers.
BT cardholders will receive online reports, with email notifications to view them, in accordance with green initiatives to reduce the carbon footprint, Gous said. Employees with access to BT's automated expense reporting solution can simply log in to reconcile charge expenses. All others are to reconcile and mark any charges as personal in the online reporting tool provided by AirPlus.
"The whole point is that we get compliance on the card for the first time, we get central billing of key expense items globally and we will have very, very detailed breakdown of what exactly we're spending with each airline, hotel chain, etc.," Gous said. BT's travel procurement team intends to use that data "to improve the deals that we have," he added. "I know that our head of procurement has already set a deadline based on the expected quality of data that we'll get from AirPlus. That is one of our strategic objectives."
"Certainly the approach they have on the launch, control and flow of data and backfeed of data into our online ledger is quite compelling and strong," Gous said. "If they believe it will be a world-class leading program, we do, too. Hopefully, time will prove us 100 percent right on that."