Corporate Card Suppliers Applaud Euro Rollout
<B> Corporate Card Suppliers Applaud Euro Rollout</B>
By Lynn Woods
As of Jan. 1, the euro was officially ushered in as the new common currency of 11 European countries, henceforth collectively known as "Euroland." Although the euro can be used only in paper financial transactions--actual coins and bills won't be circulating until 2002--multinational corporations already are benefiting from the transition, said Alan Brown, MasterCard's vice president of global corporate products.
"The euro helps with currency exchange risk, multiple billings, and the ability to integrate payment systems," he said, noting that MasterCard customers now can pay credit card expenses in euros, local currency or dollars. "We see a lot of multinationals taking advantage of this."
One of the immediate advantages of the euro is that it standardizes prices for consumers. "This will have a huge impact on airfares and hotel rooms," said Walter Sanders, vice president of communications at Diners Club, which has added a euro icon to its Global Vision automated reporting system. Multinationals also can avoid paying conversion fees for transactions made between Euroland countries.
But Sanders wasn't totally sanguine about the immediate benefits. The exclusion of the new currency in the United Kingdom and Switzerland is problematic, he said. Some Euroland merchants aren't offering prices in euros, and while the credit card providers must be able to convert the total amount of a charge in euros, such is not the case for line items. "All line items are in local currency, regardless of the merchant," he said.
For Diners Club, "many of the benefits are illusory," Sanders said, noting that the elimination of conversion fees represents the loss of a sizable revenue stream.
Brown, however, said the euro should make it easier for U.S.-based multinationals to gain wider acceptance of the card and enable them to work with a single supplier in Euroland. These have been two key challenges on the Continent, where multiple relationships have traditionally been the way of doing business.