GE Capital Offers Euro Corporate Cards

<B> GE Capital Offers Euro Corporate Cards</B>

By Mary Ann McNulty

GE Capital this month launched the industry's first euro-denominated corporate credit card program, which its parent, General Electric, and Bausch & Lomb were quick to try out.

GE's euro corporate travel and purchasing cards now are available in France, Germany, Holland, the Irish Republic and Italy. Belgium and Spain will join the program in April, followed by the remaining four countries in the European Monetary Union.

Although competitors were hard pressed to see the distinction between issuing euro cards and offering customers statements that reflect both the euro and local currencies, GE Capital said the difference can mean financial savings and administrative efficiencies for multinational customers. For GE, the new currency also allows it to issue cards without having to forge alliances with other banks, though in some instances, it might still develop alliances with local banks to service corporate customers in a particular country.

Multinational customers currently issuing cards in multiple currencies could save up to 2 percent by eliminating currency conversion fees through switching to the euro card, said Jeff Dye, senior vice president of GE Capital Corporate Expense Management Services in Salt Lake City. Statements will include both local currency and the euro. However, a GE Capital spokesman in the United Kingdom said government officials in each of the five launch countries have informed them that there are no legal requirements that statements must be issued in both currencies.

American Express said it has no intention of issuing a euro card, as its statements already are reported in the euro. "We don't see the distinction here," said a spokesperson. Likewise, Citicorp Diners Club said it already is reporting in both local and euro currencies, in compliance with what it contends are regulations to do so. Diners Club, too, is not issuing euro cards, as cardholders then would be required to pay their bills in euros as well.

GE Capital called that concern a non-issue for now, as it is focusing on customers that centrally pay for employee charges. Some of its initial customers haven't even converted all their bank accounts to the euro, a London-based spokesman said, but plan to pay GE Capital electronically from local currency-based accounts, and convert to euros by the time payments reach the card issuer.

Eleven countries in Europe are participating in the three-year EMU currency transition period. Currently, the euro is in use for electronic banking and other non-cash transactions. Actual euro bills and coins won't begin circulating until 2002.

For multinational corporations, Dye said the new euro card means they "will no longer have to deal with different banks in different countries. Our card program streamlines the accounts payable process and maximizes other administrative efficiencies."

Until now, GE Capital and other MasterCard and Visa corporate programs have been serving multinational customers who asked to have cards issued in various currencies by forging relationships with local banks. Typically, GE Capital would take data feeds from local issuers and provide consolidated reporting.

"What the euro allows us to do is work on a common platform," Dye said. And it makes it easier for customers to consolidate data on one report and analyze their total travel spend, on a worldwide, pan-European or country-by-country basis.

Consultant Shimon Avish of The Travel Management Group, Alexandria, Va., said the euro card program is great for getting a handle on what you're spending. "The objective is to get as much information in one place as possible, so you can demonstrate the value of your program," he said.

For multinational companies that also need to issue cards in Asian currencies, GE Capital is continuing to pursue alliances and partnerships. "We've already created or are creating the capability this year to issue cards in Hong Kong, Japan, Korea and Malaysia," Dye said.