U.S. Bank To Issue T&E Cards In Europe

U.S. Bank Corporate Payment Systems plans to issue commercial travel and entertainment cards this July in seven European countries to employees of North American customers. It will pilot the new product next month with about 500 employees from wholly owned Elavon Financial Services. The bank last August announced plans to self-issue cards in Europe.

The bank plans to issue Elavon-branded cards initially to customers in the United Kingdom and Ireland, France, Germany, Spain, Italy and Switzerland, according to CPS senior vice president of strategy and product Kurt Adams. Settlement options would include the euro, British pound sterling and Swiss franc, and languages would include English, French, German, Italian and Spanish. The Visa-branded cards will meet European technology standards that include full chip-and-pin capabilities.

About "80 percent of commercial card spend in Europe resides in these countries," Adams said, citing a review of international card spending within the bank's existing client portfolio and industry data. "While we are issuing in these countries, we will have the opportunity to do cross-border, too. We'll continue to look at opportunities in the market."

U.S. Bank indicated that it would continue to participate in the Global Commercial Payment Solutions network, a joint venture it formed in 2001 with Visa International and six other card-issuing banks. "GCPS allows us into certain countries that we don't have access to today," Adams said. Through bank partnerships, GCPS can issue local-currency cards in 37 countries.

"Our strategy is to follow our multinationals," Adams said. "As this rolls out, we'll get a better understanding on demand from our clients." Some clients, for example, could opt to move their corporate card programs from GCPS to the bank's new self-issued product, he said.

Adams said the primary client needs in a multinational card solution are "the single contract, single decision point of approval, global reporting and ubiquitous acceptance." Bank sales executives also promote the bank's global expense reporting solution, launched last summer and now available in multiple languages. "That's a big opportunity on the expense management side," he said. "There are differences in these card programs in Europe. We want to make sure we don't just take a U.S. solution and port it to Europe."

For global client reporting, the bank plans to use existing technologies that include its own web-based tools and those of Visa IntelliLink, Adams said. Clients "will have roll-up views in any currency and 14 languages. This tool already has interfaces between ourselves, our processor and Visa.

"We already have two clients who have said, 'We're ready to go when you're ready,' " Adams continued.

Building the business case for European expansion, officials looked at Fortune 500 businesses, "which we think is a big target here," according to Adams. "Three hundred and fifty do business with U.S. Bank and have multinational operations, and 100 currently use our corporate card products. It's a pretty strong opportunity in itself." Because midmarket companies also are expanding in Europe, "our target market is any commercial organization that has significant business" in the region.

However, the bank plans to focus on "North America-based multinationals," Adams explained. "We'll continue to look at opportunities in the market, but we really want to remain focused on this launch of the corporate card for T&E. There really isn't anything on the road map at this point to be going to European-based institutions." After launch, the bank also plans to review multinational demand for other card products, such as payables.

To support the European expansion and leverage local market expertise, U.S. Bank hired former TSYS Europe executive Alan Gibson as its director of European commercial payments. TSYS is a U.S.-based merchant acquirer. The bank also plans to add sales and relationship managers in Brussels and multilingual customer call center support from existing facilities in the Netherlands.

While new to solo card issuance in Europe, U.S. Bank parent U.S. Bancorp has been in the market for more than a decade. In 2000 it formed a merchant-acquiring joint venture with the Bank of Ireland and since acquired the European merchant business of Citibank and others, and bought out its partner. Elavon provides merchant-acquiring services that cover a "couple hundred thousand merchant locations" in Europe and has operations centers in Warsaw, Frankfurt and the Dublin area. "While we haven't been there on the corporate card-issuing side on our own, we have been there as an institution," Adams said. "We cut our teeth on the merchant-acquiring division there."

U.S. Bancorp recently announced expansions to Latin America and the Middle East, and Adams said "Asia/Pacific and Latin America are the two at the top of our radar, but we're still early. We want to get this [European] one right first."