Declining Balance Cards do not receive the same press as other Commercial Cards, but they can be a powerful part of your card program. Missouri State University is embarking on this path now—piloting a type of Declining Balance Card commonly known as a Single Event Travel (SET) Card—to get away from travel cash advances. Following is my interview with Isaac Balasundaram, Procurement Card Coordinator for the university. Learn about their SET Card plans, including some early successes and challenges.
Q: You noted that a driver for piloting SET Cards is a desire to move away from cash advances. Can you elaborate?
A: The cash advances, especially ones for our Study Away groups, often equate to large sums of cash that are deposited into an individual’s personal bank account or carried by someone as they travel. The SET Card provides so much more security and control. Today, if they run out of cash on their trip, they have to take money out of their personal account to be reimbursed after the trip is complete. Our initial focus for SET Cards is our Study Away groups, but I would eventually like to use them as a substitute for all cash advances issued by the university.
Q: Who will manage the SET Card program—the same team/person who manages the other cards?
A: Yes, as the Procurement Card Coordinator, I am managing the program and we have developed a SET Card policy and process.
Q: Please describe your application process.
A: The application form, designed specifically for SET Cards, includes fields for key information, such as travel dates, location, and purpose; estimated expenses for the trip; and the corresponding card limits needed. It also includes the terms and conditions for SET Card use, which align with our travel policy, and spaces for the appropriate signatures. As part of the policy, we are mandating training for any SET cardholder prior to card issuance.
Q: After a trip, will cardholders need to complete an expense report?
A: Yes, we developed a new expense report form. Cardholders will complete and submit it once the trip is complete, along with their receipts. Their department will also submit a cardholder statement obtained from the bank system, so we have a match to the expense report to make sure there is nothing on the card that the cardholder did not report.
Per policy, any unauthorized charges on the SET Card will be added to the individual’s accounts receivable after the trip is complete.
The Pilot Phase
Q: What does your current pilot phase entail?
A: The cards are issued by the bank in batches of 25. There is a two-week processing period, so I have already requested and received the first batch of cards. The first “pilot trip” is to Costa Rica in January. That will really tell us if this program will work for these types of situations.
With the Study Away groups, they have to prepay many expenses, so, even though the actual trip may be in March/April, they will be issued the card now—in December. The card for the Costa Rica trip was issued a couple weeks ago, so the cardholder can start pre-paying for his expenses.
Q: What are some challenges and successes you have experienced at this early stage?
A: So far, things have worked out as expected. I’ve received a very positive response from individuals who we are trying to recruit for the pilot phase of this program. The SET Card has an ATM withdrawal feature, which really benefits the cardholders who will need to have access to some cash on their trips. In some of the cases with individuals traveling to certain third-world countries, they will need to use cash for a majority of their transactions. This card gives them the security to be able to take their card to their foreign location and withdraw money from an ATM there. The downside is the fees associated with withdrawing money from an ATM that doesn’t belong to our card issuer. Whenever possible, we are recommending withdrawing cash locally prior to the trip. Also, one challenge is that I have to notify the bank prior to every foreign transaction to make the necessary changes to the card. This adds a few more steps.
A question that was brought up was vendor acceptance of a card that doesn’t have the cardholder’s name on it. To address this, I will be issuing an authorization letter on our university letterhead to the cardholder when they pick up their card, tying in the card number to the individual on the trip. We are also directing cardholders to take their university ID and their driver’s license on their trip.
Recharged Education will continue to see how the program at Missouri State University is going. Meanwhile, visit the webpage on Declining Balance Cards to gain insight from a couple other end-users.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…
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