Citibank Eyes European Commercial Card Market

Citibank is aiming to capture a slice of the European travel, expense and purchasing cards market.

The financial giant has rolled out its European Commercial Cards procurement platform, which replicates its successful North American technology and is designed specifically for European tax laws and currencies.

"We're building a local regional platform in Europe because there's different requirements in Europe," said Gary Schneider, vice president at Citibank e-Business.

Most European countries tax goods and services, and while some have moved to the euro, others have their own currency, he noted.

Citibank's global corporate clients are demanding one-stop shopping for their corporate cards, he said. Europe is the first stop in that strategy.

"The Global 2000 do not want to have multiple commercial card relationships around the world. There's lots of interest from our clients in having capabilities not just in Europe and North America, but in Asia and Latin America," Schneider said.

The U.S. purchasing card market ranges from $80 billion to $100 billion, while the travel and expense market is larger. Both Europe and Asia have the potential to match that, based on their size.

"The commercial card marketplace in Europe is two years behind the U.S. We're a little more mature here," said Schneider.

The platform being rolled out is proprietary to Citibank, he said.

"We own it soup to nuts. We are not going to third parties. We bought a software application and host it and run it ourselves and customized it to our needs."

That contrasts to other credit card companies, which have cobbled together multiple alliances, he said.

"We don't believe an alliance is as strong a solution as a proprietary Citibank global solution."

The problem with alliances, Schneider noted, is that "you can't maintain quality and replicate features and functionality, or control pricing and customer service as effectively as our customers need with that model."

A cardholder will be able to use Citibank's system to buy items over the phone, face-to-face or within an e-procurement system, at which point it becomes a "virtual card." It will connect to the company's general ledger system.

"We're seeing a lot of demand for integration into front-end e-procurement systems and back-end ERP systems from our large multinational clients," said Schneider.

Auto giant Ford Motor Corp. is first out of the block, selecting Citibank to provide travel and expense cards to 20,000 employees. "Leveraging Citibank's global infrastructure and experience will provide Ford the corporate payment toll we require to feed our Global Expense Management Program," according to Bud Moore, European accounting executive at Ford.

Citibank piloted the system in Germany and the United Kingdom and is now extending it to the rest of Europe.

"The goal is 10 countries in Europe," said Schneider.

Dealing with European regulatory and currency issues was a challenge, he noted. "Doing the due diligence by country for commercial cards is a significant effort in itself."