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By Dan O'Neill
If you own a smartphone, odds are that you've used it to check your credit card or checking account balance. You may have even paid a bill or snapped a photo of a check to make a remote deposit. As a consumer, the list of banking functions that you can complete with your phone is growing ever longer. Certainly, beyond banking apps, the ability to check email, post on social media sites, and get driving directions virtually anywhere has become a part of everyday life for many.
Commercial card issuers and technology providers have taken note of this. After all, commercial card holders are first and foremost consumers themselves, and are constantly plugged in. Business travelers in particular have developed an expectation that emails, itineraries, and boarding passes should always be at their fingertips while on the road. As such, travel tools have come a long way in enhancing traveler productivity.
However, business travelers and their employers still face some pain points in the expense management process. As shown in Figure 1, these challenges can be summarized in terms of the need for Information, Control, and Reconciliation. Commercial card issuers and technology providers have worked to address these three areas by increasingly incorporating mobile functionality with commercial cards.
Combining mobile technology with commercial cards allows an organization to address the pain points above, optimizing its travel program while creating a consumer-like experience for its employees. In fact, both commercial cards and mobile travel apps are utilized in the highest-performing organizations' travel programs (see Figure 2). From this perspective, mobile and commercial cards are inextricably linked.
Information - From a last-minute fight cancellation alert to a late-night email rescheduling the next morning's meeting, timely information is a necessity for business travelers. Providers recognize that timely card information is also important, so some solutions allow mobile access to account- and transaction-level data or card statements. Perhaps more helpful, some solutions will push email or text alerts to cardholders when their payment is due, when their statement is ready to be viewed, or when they are getting close to their limit.
These alerts are not limited to cardholders; a manager can be alerted when they receive a new expense report for approval. Similarly, with some tools a travel program administrator can set up exception alerts notifying them in real time of cardholder transactions that are outside company policy. Each user may choose to take action or not - but the key is that they have real-time visibility.
Control - Sometimes, merely accessing information via mobile is not enough; cardholders and administrators need real-time control. For cardholders, this can take the form of paying a bill or booking travel on their corporate card via mobile. If a card is lost or stolen, a smartphone can allow users to shut it off immediately. Some mobile solutions also allow authorized users to change spending limits and other card controls in real time from a phone. These features can make a card program run more efficiently and lessen the fear of fraud and abuse.
Reconciliation - Perhaps the most universal pain point in T&E management, the reconciliation process also provides the greatest opportunity. Manual reconciliation processes are costly and time consuming not only for the cardholder on the front end, but also for the organization on the back end (see Figure 3). Mobile T&E expense applications address these challenges by reducing the amount of paper needed to file an expense claim, while removing the expense report from a user's desk or computer screen.
In some apps, cardholders can create an expense claim, either with imported commercial card data or data entered manually based on a cash or personal card transaction. Cardholders can take a photo of a receipt, upload and attach it to an expense item, and then throw away the paper receipt. After allocating their expense to the General Ledger and adding comments, a cardholder can submit expenses via mobile. The expense claim can then proceed through the approval workflow, with each approver able to accept or reject the claim via their phone. By pushing each workflow action directly to the hand of the next decision maker, mobile functionality can dramatically speed the expense management process.
While many mobile innovations in commercial cards to date have focused on travel, there are certainly applications beyond the world of T&E. Plastic purchasing cards must be monitored and controlled in much the same way that plastic T&E cards are; through real-time visibility and spending controls such as merchant category restrictions or transaction velocity controls. Even when purchasing cards are virtual or embedded within the Accounts Payable process, many organizations utilize a system of approvals that parallels a T&E expense workflow. Incorporating these functions into a mobile interface can facilitate a smoother purchasing process. For embedded virtual cards, mobile interactions with suppliers, including initiating supplier payments, represents a significant non-T&E opportunity.
For years, commercial card issuers have stressed the benefits of adding a commercial card as a payments tool for organizations. These benefits are very real and well-documented. However, as market needs and expectations shift towards mobile, there is an opportunity for issuers and other providers to capitalize on the "win-win" scenario that mobile expense management brings. Cardholders' lives are made easier, while the entire organization's travel program is streamlined and controlled more effectively. In short, addressing the consumer-like needs of individuals in the value chain improves the travel program as a whole.
For more information, please contact Dan O'Neill, associate specializing in Commercial Payments, firstname.lastname@example.org.