Grasp Technologies vice president Dave Lukas claims GraspPAY, the virtual card solution that Grasp launched with Wex four months ago for air and hotel volume booked through GDSs and corporate booking tools, is his company’s fastest growing product out of the gate. He expects the tool to have processed $8 million to $10 million in volume by the end of the first quarter. He said growth is on pace to process more than $25 million per quarter by year’s end. Lukas and president and CEO Erik Mueller
spoke with BTN payment and expense
editor JoAnn DeLuna about how GraspPAY makes money, future plans with big banks and the rest of Grasp's 2016.
Business Travel News:
You've said GraspPAY is free, meaning corporates and travel management
companies don't have to pay setup fees or transaction fees. How can that work?
Dave Lukas: When [Grasp]
was talking to different banks and pitching the idea, a lot of banks agreed
this [free model] was an awesome idea and would do well, but they couldn’t make
it work for us to cover our costs just on [their] basis points [a bank’s cut of
transactions' interchange fees]. That was a problem, as there are a lot of
players behind the scenes that all take a chunk of the interchange fee. We
already have the intelligence side and Wex is a [bank identification number
operator], so they cut off a lot of the middlemen.
BTN: So fewer players
are drinking out of the interchange fee. Is there anyone beside Grasp and Wex?
Lukas: You have
rebates that you give back to clients. When we looked at our clientele and
where the rebates really start, you have to be doing some decent volume for
rebates to really kick in. If we have clients that are doing half a million or
a million, they don’t expect a rebate or much of anything at that level of
volume. When Wex and Grasp really looked at it and the capabilities, we both
agreed to make concessions and take a portion of the expenses. We worked out to
pay each other out of the interchange and be able to still do the rebates [for
large-volume clients] and essentially be able to cover our costs and make a bit
of money doing it.
BTN: So there’s still a threshold. If they reach that,
they will have to pay a transaction fee?
Lukas: Yes, in
theory, but the rebates align with the standard rebates in industry. If a
client wants more rebate, that’s where we may have to say, "Look, based on
the volume you're doing, it doesn’t work for our model, so we need to charge
you a transaction [fee]." But we haven’t run into anybody like that yet.
Even the largest ones, we haven’t had that issue yet. We’re not doing less,
we’re doing the same standard rebate tiers you’re getting in the industry. We
just figured out how to make it work. The goal is not to feed our families off
of this. It’s to provide a great solution that will continue to grow for years
BTN: And you’re
looking at other bank partners, even though GraspPAY has an exclusive
partnership with Wex?
going to spend the first year working together with Wex to make this solution
the best it can be. Midway through this year, we’ll start to look at other
providers or clients that want us to work with [particular] banks. If we can
make it work the way we’re doing with Wex, great. If not and we have to have
some sort of transaction fee, then we’ll evaluate that. Our transaction fees, if
we did go that route, will be less than the marketplace's because we know what
we have to do to cover the costs and get a little bit of margin.
BTN: So how is
launched in October and … we had over 30 new clients in November and December
alone. We have really continued that momentum into the first quarter of this
year. It’s attracted companies ranging in all sizes, from some of the largest
agencies down to the little guys and the corporates. In all the years of Grasp,
GraspPAY has had the most interest for a product release I’ve ever seen out of
BTN: What’s in store
Erik Mueller: We
had 55 percent revenue growth last year, and we’re trying to sustain that
again. It’s our 20th anniversary this year, and we’re looking for 20 great
ideas for [the travel] industry in 2016. We’ll try to be the first established
company to not only crowdsource ideas but also crowdfund to develop those
ideas. We’re wrapping up the website [where we'll source ideas in January]. By
the end of the year, we hope to have all the voting and ideas finalized,
announce the winners and then crowdfund. We don’t know what we’ll get. It could
be meetings, groups, a new form of communication—it could really be anything.
This year, we’re extending our dashboard's functionality to
go to unlimited dashboard views within the Grasp data platform. That’s going to
be released in the [first quarter]. This will allow people to visualize any
number of [travel spend and usage] items and organize them in any way they
want. With that, the whole system is getting a face-lift soon. We're building
an API that would allow people to … write their own data-visualization application
against our platform and [would] extend our ability to integrate more quickly with
data sources like online booking tools or expense management tools that have
We’re also developing a data-quality standard for the industry
so we’re all using the same yardstick. [Data quality] is something we’ve always
prided ourselves on, but it’s kind of hard to prove. Companies have their own
way of determining what that means. We may make it an open-source project as we
can’t make that decision in a bubble. We’ll be releasing something probably midyear.
BTN: What other
trends are you watching?
learning and intelligence will continue to be a trend. I’ve been pushing for a
universal [traveler] profile. That’s fragmented and messed up [right now]. There
should be one spot were travelers put their info, and then all suppliers can
essentially access and have it, or it can be pushed to a supplier when booking.
That’s a new frontier and is absolutely needed. A company like Facebook is in the
best position to do that, as they already have all the information
Virtual commerce growth is tremendous, and it hasn’t even
started yet. What that eventually leads to is the scariest thing: the app that
manages all your travel for you—to where you might not necessarily need the
travel agent. Is it really that far off to think that you can have a [mobile] app
that knows all travel information, sources from your universal profile, has your
personal payment information and when there’s a cancellation can automatically
rebook you with your preferences to make sure you make your meeting? I don’t
think it is. The travel agency will evolve to more of a travel-experience
consultant, because technology will screw up and you need those people there to
help you. As agents and TMCs have changed with online booking tools over the
years, it will continue to change as technology becomes more rampant.