London-based telecom provider BT Group in 2008 was inclined to select a U.K.-based provider for its global corporate card program, but instead chose Germany-headquartered AirPlus International for its 60,000 travelers worldwide. The move paid off during its first year, with significant savings and fewer individual cardholder late fees in the United Kingdom. BT in April 2014 renewed its card program contract with AirPlus for an additional three years.
"We went to all the big providers in the U.K., as well as AirPlus, but at the time AirPlus wasn't self-issuing in the U.K.," former BT corporate card manager Gaynor Martin said of BT's 2008 decision. "The biggest volumes of people are in the U.K., so the most important part of getting the program right was to get a good U.K. provider."
However, "we thought AirPlus had the best program," she said. "It was all in their favor."
The companies now are working on additional cost-saving initiatives.
In The Beginning
BT from the 1990s to 2003 used an undisclosed corporate card provider, before the company switched to HSBC-issued Visa cards for the United Kingdom, retaining the original provider in BT's other markets.
With HSBC, BT implemented more controls and semi-automated the card application process, according to Martin. Employees could apply for a new card using a unique reference number. The system then would send an automated email to the employee's line manager to confirm employment and that a corporate card was needed. The line manager would reply to the email only when a card wasn't needed, which would halt the application process, explained Martin.
The telecom firm, however, wanted more control over its corporate card portfolio, more spend visibility and a more efficient overall process, and wanted to settle such large expenses as air travel from a central point.
For example, BT typically sets credit limits at 2.5 times what an individual traveler normally spends on a monthly basis, but when employees' travel peaked and managers needed to increase card limits or allow for cash withdrawals, Martin would rely on card providers to make such changes. This caused delays in the process and meant that travelers could be stranded if a card limit was reached in transit, she explained.
"Requests would come to the admin team, then to the card provider. When the provider was done then we had to get a response from them and go back to the manager or employee to say it was done," Martin said. "We were double-handling the requests."
Additionally, high-spending frequent travelers tended to use personal cards rather than company-issued cards, and BT wanted to drive card program compliance to increase its rebate, Martin said.
Leap Of Faith
BT's annual U.K. travel spend in the period between April 2008 and March 2009—a year before implementing AirPlus solutions—was more than £90 million, according to an AirPlus case study. BT's demographics since have changed as it has expanded into new markets; after the United Kingdom, the United States is BT's largest market, followed by Germany. The goal was to find a "strong" U.K. provider, Martin said.
AirPlus at the time issued cards through GE Money (which was acquired by American Express in 2008). "We had already visited GE, and we didn't think they were a strong enough provider to have the U.K. program and had already dismissed them," she said.
But BT concluded that AirPlus seemed to be the best match for BT's specific needs. Coincidentally, AirPlus decided to self-issue in the United Kingdom.
"We were extremely nervous, but AirPlus was probably a lot better than any of the other providers we'd actually looked at," Martin said. "We were very comfortable with their system—all the access we could have, visibility and the hands-on to change things. We had a lot of controls, given the size of the program."
BT within two months of signing the agreement implemented AirPlus' Company Account central bill product, corporate cards, its Information Manager reporting and management system, its Invoice Control accounting and reconciliation tool and its FlexEbill electronic invoices.
While the initial switch from HSBC to AirPlus in the United Kingdom went "very well," Martin said transitioning away in the remaining countries from the incumbent supplier was slightly more challenging. That supplier "gave us a tight deadline to move all 20 countries" off of its network, Martin claimed.
AirPlus was able to implement the 20 countries within the timeframe, she said.
Operational Details
Many of the same features that initially drew BT to AirPlus continue to generate benefits. BT has visibility into every card issued, pending transactions and expenses submitted for approval. BT also can create analytic reports based on such items as spend categories—like air, hotel or rail—merchant groups or providers, Martin explained.
About 30 people on average leave the BT card program monthly, for various reasons including internal job promotions requiring less travel. BT now can immediately cancel their cards to avoid liability for unauthorized continued use. BT previously relied on card providers to cancel cards.
BT's different business ventures mean the corporation has multiple card program structures, Martin said. For example, travelers in most groups individually settle most expenses, but some groups have centrally settled cards. Likewise, different wholly owned subsidiaries are segregated, but still can take advantage of the travel program while having their own administrators, Martin explained.
BT can view both centrally and individually settled transactions for an individual trip. Airfares are centrally settled on the AirPlus lodge card, which sits with American Express Global Business Travel, BT's travel management company, and are prepopulated as business expenses. Individually settled card expenses also are prepopulated into Oracle's expense management system.
"The manager can authorize expenses, and he knows the whole amount coming out of his budget, but a traveler is only reimbursed for individually settled items on his card because [AirPlus] does a split between centrally settled and individually settled transactions," Martin said. "That's something we couldn't do with the other providers."
BT also has many engineers who don't frequently travel, but sometimes do so to take training courses, for example, as well as other contractors who aren't considered "official" BT employees, she added. For them, BT uses AirPlus' AIDA virtual card solution to generate single-use MasterCard numbers to pay for hotel accommodations and rail.
"We have separate lodge cards for contractors because of value-added tax implications, but then we book it all to different [projects] so contractors know how much each of the [projects] is costing," Martin explained.
AirPlus on a monthly basis monitors unused airline tickets and passes them to American Express Travel, to see if BT can get a refund or tax back on nonrefundable tickets.
"We're actually getting more refunds on those that we may have lost in the past," Martin said.
After implementing AirPlus in 2008 and moving significant spend off individual cards, BT's delinquency rate improved 75 percent. "It's better than when we were with the previous provider because we can put blocks on cards sooner and look for inappropriate spend," she added.
Now that BT has reupped with AirPlus, the companies are looking at additional ways to move more spend onto lodge cards. The companies are studying air travel booked through American Express Travel that coincides with locations where AirPlus has lodge cards.
"We're going to match that up and start implementing more AirPlus lodge cards in countries where we have significant travel," Martin said. "We've got quite good relationships between some of the travel management companies and AirPlus to flow data across, that in turn will increase our rebates as well."
BT also is looking to centrally settle car rental expenses.
"The more we centrally settle on lodge cards, the fewer individual cards we need, which also helps our delinquency," Martin said. "What we're trying to do is drive up average card spend. We're not encouraging them to spend more, but we're trying to get the right spend on the card."
This report originally appeared in the November 2014 edition of Travel Procurement.