MasterCard Seeks Opportunity In T&E Management

Contrary to popular opinion, one of the most hawkish overseers of adherence to travel and expense (T&E) policy is the federal government. "They were actually more stringent in their travel requirements and purchasing card requirements than the private sector," observes Steve Abrams, SVP, global corporate payment solutions, MasterCard (Purchase, N.Y.).

After the 1998 decision of the General Services Administration (GSA) to put its purchasing requirements out to an open bid, MasterCard was able to secure approximately 25 percent of the government's purchasing card business, Abrams relates. Now, the GSA is putting its $25 billion-plus of annual spending up for review again. "In their RFP, they're going to take their current product requirements to another level - more security, more fraud protection and more data," says Abrams. And MasterCard intends to be ready, he adds. "We have a couple of new twists, specifically in fraud reduction and security."

The cost-controlling requirements of the federal government have helped MasterCard to refine its offerings for the broader marketplace. For instance, government agencies often buy services from one another. Even if no money changes hands, the information exchange must still occur, and purchasing card solutions have to take that into account. "That drove innovation - it drove us to develop some more features and benefits for our products, which we then sold into the private sector," relates Abrams.

Indeed, travel and T&E management has become a core focus for MasterCard as it seeks to expand its integration with corporate clients. Whether it's issuing purchasing cards, fleet cards for rental vehicles or company-issued credit cards, the business-to-business market has great potential for the card association and its member banks.

The largest reservoir of untapped potential is the small to medium-size business (SMB) market, which comprises approximately 60 percent of MasterCard's overall global volume, according to Abrams. "We see a tremendous opportunity on the business-to-business side," he says. "That's the hottest segment that we're seeing right now and probably will be for the next two to three years."

Larger corporations have greater demands to go along with their higher purchasing volumes. "The Fortune 500 corporations are asking to have one multinational program - one issuer - to support their employees' needs for travel and purchasing on a global basis," says Abrams. "Almost every RFP [request for proposal] you see from a large multinational is now asking for the same type of service delivery."

Corporations also are seeking a greater ability to use the information garnered from transactions. One example is sifting through travel and expense data, which provides companies with numerous cost-cutting opportunities. "The corporations are now doing a much better job on the back end - analyzing exactly what you did, where you stayed and what you paid for the room - to better understand if you're adhering to policy from front to back," notes Abrams.

Corporations also can achieve T&E-related savings on the front end, where it's becoming more common for employees to do their own travel research, rather than rely upon a travel adviser. "You're going to see an awful lot more of self-service in [business] travel," predicts Abrams.