JPMorgan Chase will exit the international commercial card
business by year-end, a bank spokesperson this week confirmed to BTN.
The decision came less than three years after JPMorgan Chase
partnered with German payments firm AirPlus International to provide the bank's
large, U.S.-based corporate clients a cobranded global payment solution.
"We are concentrating on areas where we can best meet
clients' needs for a competitive offering and superior client experience,"
JPMorgan Chase commercial card business spokesperson Edward Kozmor said in an email. "We
will move clients off EMEA platforms by December 13, 2015."
The Company Dime
first reported JPMorgan Chase's intentions.
Kozmor said JPMorgan Chase is working directly with its
multinational clients "to ensure a smooth transition for their
international card programs to a new solution of their choice." The bank
also is working with those clients to maintain their North American card
programs, according to Kozmor.
Joint customers of JPMorgan Chase and AirPlus will remain
with the latter firm, confirmed an AirPlus International spokesperson. "But
in which way the further cooperation with [JPMorgan Chase] will continue has
not been finally decided," the spokesperson added.
Aerospace and defense technology company Northrop Grumman
has been a JPMorgan Chase client since 2009. "Our existing program we have
in the U.K needs to be replaced," said Northrop Grumman travel analyst and
meeting planning manager Holly Walker. "We have abandoned hope that there
could be a single card provider globally, and we are hammering out local
relationships, which is far more challenging."
Still, Walker said, Northrop Grumman is sticking with
JPMorgan Chase in North America. "I have no fear they're going to leave
the card business. It's too profitable. There are just so many regulations that
make it very challenging [abroad]," she said.
In 2011, JPMorgan Chase reported $6.3 billion in charge
volume on U.S.-based corporate travel and entertainment accounts, according to BTN's 2012 Business Travel Survey. In
2012, AirPlus International offered a global payment solution to large, U.S.-based
clients and prospective clients, and JPMorgan joined up. At the time, JPMorgan Chase
corporate card executive and managing director Lionel Le Meur said, "We
thought we could really leap ahead of many of our competitors in providing that
solution to many of our clients."
Harsh Reality
As companies expand internationally, many seek a single
global card supplier to leverage cost savings, data consistency and workflow
simplicity, but that goal also has proven challenging.
"We are seeing increasing demand from clients for
international programs, given the growing needs for centralization, efficiency,
transparency and standardized global expense policies," Citi global head
of commercial cards Manish Kohli told BTN in an email.
"Given the patchwork of different evolving regulations, it can be
challenging for issuers to run global programs," but he added, "We
will continue to invest in this business and support the growing needs of our
clients."
According to BTN's 2015
Global View survey, 34 percent of 138 travel buyers with multinational programs
surveyed negotiate with their primary corporate card provider on a global basis,
while 26 percent allow different regions to have their own corporate cards.