Smart Travelers Use Smart Cards

By Hanna P. Murphy / November 15, 1998

Smart Travelers Use Smart Cards

By Hanna P. Murphy

Hanna P. Murphy, CCTE, is manager of corporate travel and fleet agreements for Siemens Corp. in Sunnyvale, Calif.<hr>

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Travel managers observe with dismay that their efforts to steer all reservations to their preferred travel agencies are continuously undermined by the traveler who likes to

prove that he or she can find a lower rate than the agency can provide. Moreover, the travel managers' preferred suppliers--who continuously request the travel manager to deliver more market share by increasing the control over agency processes--draw corporate travelers to their Website by enticing them with hot deals. They send road warriors direct e-mail messages alerting them to last-minute special rates, which the agency cannot access.

How does the supplier expect to receive a full picture of the travel manager's business? How will the travel manager keep or improve his or her agreements if the travel manager cannot show total volume purchased? What is the value of an agreement if a substantial part of services go undiscounted?

Companies that have implemented a mandated corporate card program or implemented T&E software are fortunate--they can show purchased transactions. The gap between the corporate card data that shows transactions purchased and the supplier data that shows transactions sold is growing. How can a travel manager ensure that the direct purchased transactions are discounted? Utilize smart card technology!

The Siemens/U.S. Bank smart card is Visa-branded, and contains a magnetic stripe and a chip. The card can be used at all Visa merchants, unless blocked by Siemens travel policies, and is designed to reduce the number of cards a traveler carries. It is a replacement for the traveler's current corporate card and affinity cards.

The chip contains identifying information ensuring that the Siemens traveler receives negotiated rates from core travel suppliers. The information also interacts with the suppliers' back-office systems for proper billing. This functionality allows Siemens to realize significant discounts that currently are lost by taking the burden off of the travelers, travel arrangers and the supplier's staff to look up and enter the correct rate. Siemens and its travel suppliers will realize significant administrative efficiencies.

In 1995, Siemens contacted various preferred suppliers and pointed out a data-tracking problem that cost the company considerable funds. Siemens smart chip group felt that smart chip technology could present the solution to the problem. U.S. Bank's corporate payment systems was requested to insert the 8-bit Siemens smart chip into its corporate card. Then, U.S. Bank contracted Visa and 3G International Inc. to realize the project.

The fascinating aspect of smart card technology is its ability to have multiple, easily reprogrammable applications within the chip. At first, our preferred suppliers believed that the same result could be achieved by using the magnetic stripe. Yet, the magnetic stripe cannot host multiple applications. Secondly, imagine that you have to continuously refresh the supplier's database with a download of employee corporate card files. From a security standpoint, this is a risky business; from an administrative standpoint, it is a nightmare--particularly if the company demonstrates a high percentage in employee turnover.

In the future, due to smart card technology, our travelers only need to know the name of Siemens' preferred suppliers and will travel with one multifunctional card. Rate knowledge is no longer an issue. If the supplier decides to change rates during the year, the chip will make sure that the traveler receives the new rate.

We trust that the results of our current smart card pilot will show that we are on the right track. We have a long way to go. Suppliers that invest in this technology assist their client in cost containment, which strengthens the partnership.

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