The Payments Iceberg: Innovation and Realities

February 25, 2018 Lynn Larson

In the 1970s, anthropologist Edward Hall developed the iceberg model of culture to express how visible aspects like fine arts are dwarfed by what is hidden below the surface (e.g., relationships, attitudes, approaches). The concept could be applied to the payments industry as well. This month, while at the Cards and Payments on Campus Conference by PDG, I attended sessions about emerging technology that dazzle the mind and represent the tip of the iceberg. There are lots of great things happening. Yet, I also encountered—as I do every time I am at an event—challenges that have plagued end-user organizations for decades. It’s the reality that sits solidly under water. As a result, I have formed three conclusions, as outlined below. Take a look and see what you think. I welcome comments and always enjoy hearing different perspectives.

Three Conclusions

Innovation has multiple personalities.
Gaps between different entities keep getting bigger.
Payments do not always make the priority list.

The Multiple Personalities of Innovation

At the conference, Matt Dill of Visa addressed the future of payments. Some advancements, like Amazon Go (“a new kind of store with no checkout required”), perfectly illustrate how innovation can be baffling, appealing, and necessary all at once. We may not always understand how something works, but we think it is cool. The practical, necessary side of innovation include factors like payment convenience and security. Payments have to seamlessly mesh with our ever-expanding, technology-driven world. Innovation will continue. It’s exciting.

Widening Gaps

I heard attendees ooh and aah over what Matt showed. Then, during Q&A at the end, some questions pertained to longstanding struggles end-user organizations have (e.g., trying to pay remotely for the hotel stay of a traveling employee and hotels requiring a copy/photo of the card). Throughout the conference, end-users shared the same types of challenges that I heard 15 years ago.

On one hand, technology is soaring. On the other hand, some organizations have not changed anything about their payment strategy in decades. Providers have solutions for common challenges, but some organizations are not pursuing them. The gaps are widening, which leads to the last point.

Payments Do Not Always Make the Priority List

In many cases, executives within end-user organizations have too many initiatives to manage and sales goals to meet. No one has time to address something if it is not absolutely broken, so B2B checks remain. Checks are costly and inefficient, but, as some execs would argue, they get the job done.

Real, across-the-board change will not occur within the end-user community until there is an overhaul of decision makers. We need more leaders who: 1) embrace payments innovation at a consumer level, and 2) see the value in similarly aligning B2B payments. Finally, the decision makers need to be at industry conferences to see what is possible.

See more about payment strategies.

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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Before You Accept: Questions to Ask Interviewers

February 14, 2018 Lynn Larson

Approximately 29% of workers plan to look for a new job in 2018, according to a survey from Accountemps. If you are one of them and fortunate enough to earn interviews, expand your preparation beyond researching the employer and anticipating interview questions. Consider what you will want to know about the job (besides the compensation package). In particular, for a Commercial Card program manager or administrator position, following are possible questions to ask interviewers at some point during the interview process to help you evaluate whether the job could be right for you.

Possible Questions

Before the interview, determine what is most important to you. What program drawbacks or challenges can you deal with? Every program has them. What will be too frustrating for you? Gather a mix of information—facts, opinions, and perceptions.

Program Facts and Metrics

What card products/solutions are used today?
Who is the card provider? When does the contract end?
What technology solutions are used for program management?
What is the current program size (spend, transactions, cardholders, geography)?
What percentage of B2B payments are captured via the card program?

Organization Vision

What are the organization’s program goals and objectives?
How does the organization want to grow the program (e.g., more cardholders, additional countries, new allowed spend categories)?
Where do cards rank in terms of the overall payment strategy?

Perspectives, Buy-in, and Support

What are the biggest program challenges?
What are the biggest opportunities?
What are the most notable program successes to date?
Tell me about program buy-in by cardholders, their managers, and executives. Does anyone resist or resent the program?
How do procurement and accounts payable provide program support?

Auditing and Accountability

What have recent audits revealed about the program?
Who performs transaction auditing? How does the auditing occur (manually or via technology)?
Is everyone, including executives, held accountable for their respective card program role?

Look for the right job for you. Ask questions about the card program to evaluate whether the job would be a good fit.

About the Position

What qualities do you feel are most important in a card program manager?
What should be the priorities of the next program manager?
Is the role a decision maker for the program?
Are you looking for the next program manager to instigate change?

Final Thoughts

While everyone will have different priorities, I think there are some universal red flags. I would steer clear of a program that:

is not supported by management
is plagued with audit findings
fails to hold employees accountable

Conversely, an organization eager to improve and/or expand the card program—with the program manager leading the way—would be a good sign. Still, it pays to dig deeper before accepting any position, especially if/when some of the questions posed to you by an interviewer seem strange.

For related resources, such as tips for hiring a program manager/administrator, visit the Program Management page.

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Internal fraud case serves up a reminder for all.

February 5, 2018 Lynn Larson

My local news dished up another case of internal fraud that every organization should take seriously to avoid making the same mistake. A former Allina Health vice president is facing multiple felony-level embezzlement charges stemming from false expense reports and unauthorized charges on his company card. It’s possible the crime started more than 10 years ago. How could this be? What did the company do wrong? Could your organization be at risk? Keep reading to see what the county attorney revealed, as reported by the Pioneer Press.

Lesson to Learn

The case is evolving, so many details are still unknown at this point. However, unauthorized charges include season tickets to local professional sports teams. Allina placed the executive on leave when he could not justify his expenses. February 14 is the related court date. This will be an interesting case to watch. For more information, access the Pioneer Press article.

Hennepin County Attorney Mike Freeman observed that the case follows a familiar pattern, explaining, “The employee is highly trusted and, over time, the good financial safeguards stop being applied to that employee.” Sadly, this is all too true. Every internal fraud story that I’ve read indicates some degree of an organization not monitoring an employee’s activity.

It is human nature to be swayed by looks, personality, accomplishments, job position, tenure, etc., even though none of these things indicate the likelihood that someone will or will not commit a crime.

I also think about the “ideal” cardholder—someone who is always on time and accurate with reconciling transactions, and organized with their supporting documentation. When a cardholder has a proven track record, I can see how it would be easy for a manager to skip their review duties and, chances are, the cardholder is trustworthy. Nevertheless, assumptions and intuition should not replace the execution of control procedures.

Can you pick which employee is most likely to commit fraud at your organization? You might be looking at the wrong bunch.

Action Items

Evaluate how well your organization applies measures to detect card misuse and inappropriate expense reimbursement requests.

Are managers doing their jobs? Help them be successful; see a related blog post for tips.
Do you have an effective auditing protocol? Making use of technology typically yields better results than relying on manual auditing. It might be time to rethink your P-Card auditing approach.

Consider sharing news articles about internal card fraud with your management to illustrate what can happen.

If your organization already does a good job with holding employees accountable for their roles, you can use these types of articles to highlight the strength of your program.
Conversely, if you lack confidence in your organization’s controls, such articles can help support your quest for improvement.

Access more content on P-Card controls and additional blog posts on fraud incidents.

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