Data Dive

Data Dive, Thankful Edition: Chase, FLEETCOR And SMBs Of All Sorts

Data Dive: Intuit, Zillow And Amazon

Most Americans will be looking forward to a shorter than average workweek, as its backend will be taken up with eating, giving thanks and shopping. Except, of course, for the 26 or so percent of you who have already finished your Christmas shopping – you guys can enjoy an especially long tryptophan nap, we guess.

There isn’t much we can do to help you get a head start on eating, nor is there any way we can compete with the nation’s many retailers in terms of helping you get a jump on the shopping. But we can serve you up a heaping helping of things causing thankfulness in and around the payments and commerce ecosystem, to help you warm up for the big day on Thursday.

On the menu this week:

FLEETCOR “Family” Set to Get Bigger

According to reports from last week, it seems Western Union and FLEETCOR are rapidly approaching an agreement to sell WU’s business payments operations to the fleet payments firm.

Unnamed sources reportedly close to the issue report that the deal could be worth $600 million for Western Union Business Solutions. Reports of the acquisition remain unconfirmed at this time, but Deutsche Bank Analyst Ashish Sabadra speculated in September that FLEETCOR would be the most likely potential purchaser for WU’s business payments unit. Citi is reportedly advising on the purchase.

Bloomberg had earlier reported that Western Union has been looking for a buyer for its unit that provides cross-border B2B payments services. FLEETCOR, meanwhile, has been expanding its reach as a B2B payments firm since its acquisition of Cambridge Global Payments last year. Neither firm as of yet has offered any official comment on the potential purchase, though Western Union executives have said they would potentially be interested in selling off the B2B payments business.

“We certainly need to evaluate other potential opportunities for that business,” said Chief Financial Officer Rajesh Agrawal earlier this year. “Our goal is going to be to maximize the value of that business, whether it’s in our hands or someone else’s.”

FLEETCOR, for its part, has affirmed its continuing interest in using M&A to grow its operations.

“I hope the message is clear,” said CEO Ron Clarke during the company’s third-quarter earnings call in October. “We’re working on a number of new incremental growth initiatives in each of our four businesses. … We’re going to keep getting behind the mid-sized accounts we’re on, and we’re going to find a way internally, or through [M&A] deals, to build a bigger position in the small market.”

Chase and Getting Consumers Thankful for Contactless Cards

Tap-and-pay functionality is set to begin rolling out across Chase’s entire Visa credit card portfolio, according to Chase, and the functionality expansion will officially begin at the end of this year. The rollout will continue throughout 2019. The company also said it will debut contactless debit cards in the second half of next year.

In an interview with Karen Webster shortly before the news was announced, Abeer Bhatia, president of Chase Card Services, said the overarching goal with tap and pay, and the eventual enablement of that functionality across all Chase Visa cards, is to “let consumers pay the way they want to pay.”

Chase noted in the rollouts announcement that the contactless experience was designed around EMV chip technology to be “simple and secure,” and easily done at any card reader bearing a contactless symbol. Many transactions, according to Chase, will be completable with only the tap – no signature required. The company noted that each contactless transaction produces one-time-use codes to protect payment information.

While popular globally, contactless cards have been slower to get off the ground in the U.S., largely because very few issuers offer them thus far. Chase is the largest card issuer in the U.S., and a major step toward scale for contactless. As of today, 40 percent of transactions outside the U.S. are done via contactless card, and as of this rollout, 70 of the top 100 offer the ability to pay using tap at checkout.

Bhatia further noted to Webster the speed of tap and pay, stating that “the payment itself is about 60 to 70 percent faster.”

“‘Cool’ is one way I can describe tap and pay,” he told Webster, “and convenient and easy and secure are other ways I can describe it.”

When questioned about near-term goals for the rollout, Bhatia said that “by the end of January, we expect about 10 million Chase cards to be contactless.”

SMB Payments Power-Ups

American Express and Square both announced some new rollouts last week that could give SMBs new reasons to be thankful this holiday season, by making it easier to manage expenses and employee benefits.

American Express announced Thursday (Nov. 15) the launch of American Express Go, a new digital service aimed at helping mid-sized and large companies handle business expenses for temporary workers, recruits and employees without corporate cards. The program allows workers to tap into a virtual card that can be used online and over the phone, as well as an option for a plastic card for in-person payments.

American Express said the new service offers an easy mobile experience for freelancers and project-based workers who need to make business purchases with company funds, thereby removing the need for a reimbursement process.

“Mid-sized and large companies are operating with a new, dynamic workforce as they increasingly employ freelancers and contractors, who previously had to wait for several weeks to be reimbursed for business and travel purchases,” said Gint Balodis, vice president of global B2B products for American Express global commercial services. “American Express Go was created to alleviate customer pain points faced by companies and their changing workforce by combining the control and flexibility of virtual cards with the convenience of a physical card that can be swiped on the go.”

Meanwhile, Square announced it is enhancing its payroll platform for small and medium-sized businesses (SMBs) by integrating benefits solutions, the company announced on Wednesday (Nov. 14).

The goal is to smooth out SMBs’ employee benefits management by making it possible to add health insurance and retirement savings solutions directly into its payroll service, features that could reduce the tax burden on small firms.

Square noted that an internal survey of its Square Payroll clients found the addition of employee benefits to be one of the largest hurdles for business owners.

“We’ve heard again and again from sellers what a pain point payroll is,” said Square Seller Lead Alyssa Henry, according to the report. “We’ve heard many of them are doing it on paper or even paying under the table – not necessarily to avoid taxes, but because of the complexity.”

The new features come just months after Square’s Payroll App rolled out, providing business owners with a mobile self-service solution that expands upon the firm’s desktop-based payroll services.

So, what did we learn this week?

There is always plenty to be thankful for out there – even if those things don’t always quite top the headlines.

Happy Thanksgiving.

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