U.S. Bank has developed a combined travel, payment and expense offering for "emerging middle market" clients, built from its acquisition of TravelBank, the financial institution announced.
With the Commercial Rewards Card, U.S. Bank is targeting companies with $10 million to $150 million in annual revenue, which "completes our product set" by filling the gap for companies for which small business cards are not a fit but traditional corporate card and expense offerings are too complex, said Dan Skaggs, U.S. Bank's head of middle market bankcard product. These companies have "big-company needs but without a lot of the resources and staff that comes with that," he said, adding that he estimates there are about 200,000 of them in the United States.
"They have dozens or even hundreds of cards that are out there and need easy program management," Skaggs said. "They want quick signups and application; they want to integrate and reconcile all their travel and other expenses easily with their accounting processes, and a lot of them are using paper and spreadsheets and are using disparate systems."
From TravelBank, which U.S. Bank acquired in late 2021, clients will get help in managing and reducing spend, putting policy controls in place and accessing consortia rates that smaller companies wouldn't be able to qualify for on their own, TravelBank cofounder and CEO Duke Chung said.
"They have a card program, separate expense functionality, and they'll evaluate a travel program provider, so what we're bringing to market is the ability to bring all of this together," Chung said.
In terms of the payment aspect, Skaggs said clients will be able to have corporate liability rather than personal liability for employees, which generally is not available from small-business payment products.
At the same time, the offering has a lower threshold for rebates than large-market-focused cards. Clients will get 1 percent cash back if they spend at least $150,000 per quarter, and the rebates are issued quarterly. Larger programs typically required at least $1 million in annual spending for rebates, and those are issued only once per year, Skaggs said.
A handful of clients already have been using the platform, and it currently is specific to U.S.-based clients, though there is "always potential" for future geographic expansion, Skaggs said. With target clients on their own growth path, there's also an idea that they have a "graduation path" and can grow on the platform and ultimately move to products designed for larger companies, he said.
Chung said bringing together the user interface was a "big first step" in the acquisition by U.S. Bank, as it is bringing together data sets that traditionally would have to be managed across multiple providers. The data side could be a target for future development, he said.
"We potentially down the road can do a lot more around automation and around AI and some of the exciting areas that can bring together this data," Chung said. "We feel this is a first step in the innovation and are excited to see where this takes us in the coming quarters and years."