Diners Launches Group Card

Citicorp Diners Club is introducing a new group event charge card, the first payment system vehicle designed for corporate meeting planners to charge and track expenditures.

The card is initially being offered to Diners Club customers, who have expressed an interest in products designed to help them manage group and meeting expenses, said Rob Engelman, director of central billed products for Diners. The card, called the Group Event System, can help a corporation track expenses by region, department, meeting planner or event. In addition, corporations will be able to track spending by vendor or destination, which can be used in negotiations.

Diners will work with corporations to determine the best way to issue cards, assign spending limits if desired and track spending, Engelman said. The card vendor offers an unlimited number of accounts and sub-accounts, but each meeting must be identified by a separate account number.

Each meeting planner in a corporation could be given individual accounts to track expenses for meetings they are planning, or all planners could be given cards for the same account if they are all working on one meeting. Planners also might be given multiple charge cards to use for each meeting they handle.

Account representatives will work with the corporation to close accounts as soon as events end, prohibiting additional expenses from being charged to an account, Engelman said.

Monthly bills will be mailed to each individual to ease reconciliation. Corporate executives will receive monthly management reports that will allow them to analyze spending by each meeting planner, each event, each department or by vendor. High-volume spenders will be given Global Vision reporting, Windows-based software that lets users analyze spending on their desktop computers, slicing and dicing the data any way they want.

The group card will carry no fee, but will be centrally billed, with the corporation liable for all charges. Payment cycles and terms are negotiable, with up to 62 days to pay. The cards can be used to access cash at more than 300,000 automatic teller machines worldwide.

Like other Diners Club cards, the group card offers cardholders insurance and traveler benefits that include full-value primary car rental collision and loss damage coverage, $350,000 in travel accident insurance, $1,250 in excess baggage insurance, 24-hour worldwide medical, legal and travel assistance for authorized travelers, and access to more than 70 international airport lounges and business centers worldwide.

The cards can be used worldwide at any airline, hotel, car rental firm, railroad, restaurant or other establishment that accepts the Diners Club card. Meeting planners could quickly charge a deposit for meeting or sleeping rooms to their accounts, Engelman said. Charges of any amount can be made on the card, although amounts over $100,000 must be pre-approved via a phone call to an authorization unit.

Although many florists and special event firms might not accept the Diners Club card, all can be signed up as merchants, Engelman said. Diners can even sign up independent meeting planners as merchants to allow a corporation to incorporate the independent's fees in a consolidated bill.

From the merchant standpoint, payment will be faster and with fewer administrative costs, Engleman said. However, merchants are charged a negotiable fee--typically less than 4 percent--to accept the card.

"There is no question that there is a big market for Diners," said David Hillman, a consultant who specializes in the card market for Parsippany, N.J.-based Deloitte & Touche. Meetings generate a limited number of transactions, but are typically high volume, which charge card vendors love.

But for corporations that have developed sophisticated means to track meeting expenditures, the new Diners product doesn't appear to offer many advantages. In fact, companies like KPMG Peat Marwick have already developed their own meeting tracking mechanisms by opening and closing various ghost accounts.

"While there are some advantages, they aren't real significant unless Diners can provide project-by-project detail," Hillman said. "I would hate to think you'd have to get a separate accounting number every time you have a new meeting."

If Diners could have vendors capture and pass through project numbers, the product would offer more advantages to companies, Hillman said. "Unless you can eliminate labor and provide improved information, the advantage is not very compelling as you're not dealing with that many transactions," he contended.

However, for corporations in the early stages of segmenting meeting costs, this product just might offer a solution to track expenses and cross-leverage volume without coming across as a new "big brother" mandate from above, noted one travel management consultant. A product that could collect information without additional work would be seen as an enhancement.

"There is a clear value in being able to identify meeting expenditures," said the consultant, who did not want to be identified. "Many of the ghost accounts established for meetings are tracking only air."

Industry experts noted that Diners Club sales reps also might raise the awareness levels within corporations of the need to track meeting expenditures separately.

Diners Club research indicates that the current corporate group meeting and event market is more than $10 billion. By capturing the meeting business of its existing client base, Diners executives believe they can significantly increase charge volume on its brand.

With the focus on its existing client base, Diners isn't interested in issuing cards to independent planners, agencies or companies whose primary business is sponsoring seminars or conferences.

"We're repackaging a product we already have," Engleman said. "We have the ability to take the corporate card and market it for different uses, like Arm and Hammer has done with baking soda.