Interview: U.S. Bank Corporate Payment Systems' Alan Gibson

About a year after U.S. Bank's Corporate Payment Systems business started to issue commercial cards in Europe, bank officials last week announced plans to expand to emerging markets. To lead the charge, the bank promoted Alan Gibson to manager of emerging markets, in addition to his role as CPS senior European officer. Gibson joined U.S. Bank in 2010 after positions with TSYS in the United Kingdom, MasterCard International in Belgium and other banks in Europe. Gibson spoke to BTN's Mary Ann McNulty about the bank's new markets, staffing, partnerships and customer demands. An excerpt follows. 

Which emerging markets do you plan to explore?

It's really where our customers will take us; we will follow them. It's well publicized that the emerging markets in the Asia region and larger markets in South America are main targets [for business], so those are the markets I expect to be covering. But we will follow our U.S. customers. That's the strategy we stated for Europe and will continue to follow. The first step was to look at the European market, but customers more and more are asking for a complete global offering. We have to make sure we have that global offering.

How has European expansion gone thus far?

Europe has been a great experience for us in the first six to nine months. That's allowed us to get senior management approval to look at other markets. Certainly we see partner banks as a key part of that strategy, and we're looking forward to that growth.

How many new customers have you signed?

I prefer not to say, but we've put in place customers across the market. It was important to us to get the right customer and market mix. We weren't sure which countries would need to be covered, but we put a stake in the ground to cover main markets: the United Kingdom, Ireland, Germany, France, Italy and Spain. If you look at the market size, that's probably 80 percent to 85 percent of the traditional market. We also set up in Belgium and the Netherlands, and we're looking at Portugal and Sweden in the next two months. We'll be adding currencies and language support. We support now in English, French, German and Italian and are looking to put Dutch in place in the next month. We have a customer service center in Holland and our own customer support in Frankfurt. We also can look to our corporate bank in Ireland for support and, if need be, to our merchant business in the United Kingdom.

When you launched in Europe, you had no plans to establish a sales force there to go after national companies. Has that changed?

It has changed. We have appointed two key salespeople in this region. U.S. corporates—existing and new customers—remain our main focus, but we realized that many of the companies have decision-makers or influencers in this region. So we're complementing the sales efforts in the States with local experts who can visit, support and provide their expertise.

You mentioned the importance of partner banks. Is that through the Global Commercial Payment Solutions network?

GCPS was the partner group, but it was disbanded at the end of last year. When GCPS was set up 10 years ago, it was a great arrangement and had been fantastic. But as many of the participants evolved, their products and approaches to the market and interests differed. There was a need to refresh that setup. We continue to work with many of those partner banks but in a new and improved format. We're working closely with our scheme partner, Visa, and evolving that solution.

What are clients asking for today?

More customers are asking for single contracts, product standards, single implementation and data standards. All of those things we're working on within the global framework. A single contract across the world is quite a challenge. But it is something that we need to get agreement on where we can. We have to get the balance between theory and practice with banks and customers. That includes whether our customers are in a legal position to sign a single contract. Often customers require local signatures. We're looking to make sure the contract-signing process is as simple as possible. We've got to move away from customers dealing with 10 partners and separate contracts. In terms of product functionality, [customers want] product standards across the world where it makes sense to have a single defined product. Different countries have different market practices, and we've got to recognize those. Customers also want a single point of contact for ongoing account management and relationship management. Customers are looking for one point of contact but also want local expertise on the ground to talk in a local language or get local input. It's getting that mix right for global common product standards, contracts and relationships, but also having that local expertise where our customers are getting the best knowledge. Many companies have a desire to move into new markets, but don't have knowledge of those markets. We can help them with local knowledge and practices, even if it's making the contacts locally to hold their hands and stand besides them as a partner.

As you expand, how do you intend to get the reporting consistency that clients expect?

What we have, working with Visa, is common data standards and the insistence that if we're working with partner banks, they adhere to those standards. That's a prerequisite for doing business. It will only be by exception that anyone will be allowed to participate in that program if they don't meet the data standards.

Last summer, CPS head Kurt Adams talked of plans to expand geographically as well as within the value chain. How have you grown there?

Single-number solutions are one of the key areas. It's important that we have variable payment capabilities. We obviously have credit cards, but prepaid and debit are both products that need to complement that solution set. One thing we're seeing in Europe is that many merchants are adding additional fees to the merchant service charge based on the payment instrument. If we can offer variable payment instruments to customers, perhaps we can improve the overall value chain and business case to our customers. It's also partnership and working with key influencers. More and more, the end-to-end purchase-to-payment process is being automated and integrated, so it's important that we get our payment solutions embedded in those partner solutions. That's what we're working on.

For customers who are big users of Lufthansa, how have they responded to the new card fees?

Whether those fees will continue to be allowed in the marketplace is something regulators continue to look at. At the moment, they are happening, so we have to help our customers as we can with variable payment options. That's an area we're looking to expand into. It's not just airlines—hotels, local taxi companies and more are imposing card fees. It's becoming widespread in many of the European markets and top of mind for many of our customers.