TSYS recently collaborated with the Global Business Travel Association (GBTA) Foundation on two surveys looking at the use of corporate T&E cards. The two surveys allow for a fascinating, 360-degree look at T&E cards from the perspectives of both travel managers and business travelers. Taking this approach, it’s not shocking to learn that while the wants and needs of business travelers and travel managers converge in some areas, there are areas of divergence as well. I was most interested in two key pain points for survey respondents: personal card usage within a spending program, and improving financial controls.
As the report indicates, travel managers are keen to make life simple for their traveling constituents. They share their travelers’ enthusiasm for mobile-based solutions and mobile payments. At the same time, travel managers rated the opportunity to improve controls and compliance equal to the opportunity to improve rebate programs (the two tied for top areas for improvement).
I was particularly intrigued by comments from author Christina Hall, senior product development manager at TSYS Commercial Services who said, “One surprising finding is that despite high satisfaction with corporate travel card programs among both business travelers and travel administrators, personal card usage among business travelers remains high.”
Many of our customers have shared that personal card use among travelers can be frustrating and often lead to non-compliant behavior that is wasteful and abusive. The challenge for travel managers is addressing personal usage in general, while addressing wasteful and abusive spending as it occurs, whether through personal use or not.
The Problem with Using MCC Controls Alone
Corporate card program controls have come a long way from the era of merchant category code (MCC) focused controls. Today’s card-focused controls include highly granular options for establishing authorization rules that can include factors such as location, time of day, and type of purchase. However, these increased options for highly granular control often come with a price; the cost of keeping up with these MCC changes is high and the degree of difficulty can be great.
MCC controls aren’t all bad, and are great for black and white merchant categories. For 80% of our customers, restricting MCCs related to plumbing supplies makes good sense for corporate travel cardholders. But for our customer whose business includes plumbing supplies, it does not. I am reminded of our customer who discovered through Insights On Demand for T&E that a corporate travel cardholder had used his company card to pay for a $20,000 funeral. When I have shared this anecdote over the years it is not unusual for someone to ask, “Why hadn’t this company blocked the funeral home merchant category?” This is a very reasonable question to ask, but in the experience of this particular client, this category was also used to send flowers and they had learned the hard way that blocking it created more problems than allowing it.
The next question is, “Why wasn’t there a limit to the amount that is authorized for this merchant category?” -another good question. While it is possible to use trial and error to determine an amount that fits policy, allows for regional differences in cost, while limiting the possibility of out-of-compliance use, our customers tell us that this level of card management can be tedious and time consuming. Our customers tell us that managing exceptions to these controls can be difficult, especially when exceptions occur that can discourage use, which means corporate card use suffers in favor of personal card use.
The alternative is to focus control and compliance efforts on 100% automated review of expense transactions. Company card policies are easily translated into the configuration of pre-built expense review systems like Oversight Insights On Demand™.
Oversight has teamed with TSYS to provide participating banks with the ability to make corporate card transactions available for analysis without any effort on the part of their corporate clients. By automating the process of monitoring and reviewing 100% of corporate card transactions, Insights On Demand serves as a control for detecting non-compliant card use, while helping to identify the cause of the non-compliance. In many cases, our customers tell us they are able to address the underlying factors that contribute to the non-compliant transactions so that it is less likely to be repeated. Oversight Insights On Demand – Powered by TSYS provides this increased level of control and compliance without heavy lifting for purchase card administrators and T&E managers. Best of all, employees can spend without being burdened by restrictive MCC policies, and personal card use can be monitored through the software as well. For the 33% of survey respondents who want to improve their program, it seems like Oversight Insights On Demand- Powered by TSYS is the picture-perfect solution.