As 2015 wraps up, we take a look back at the year in commercial cards. The biggest stories suggest a trajectory of mobility, sophisticated data analytics and the continuing effort to retreat from controversial practices. Take a look at what these stories were below.
The biggest story of commercial cards this year was, hands down, American Express’ decision to make these products compatible with Apple Pay.
Apple’s mobile wallet product, like others on the market, has seen slow adoption among consumers, despite expansion into new global markets and other players deciding to develop their own mobile wallet solutions.
But while Apple Pay continues its fight for traction, American Express made a big step towards mobilizing the commercial card this year. 2015 began with commercial cards getting denied when users attempted to upload the cards to Apple Pay. But in August, American Express announced that Apple Pay now supports its corporate card products, the first major card issuer to do so.
“Businesses today are going digital, and American Express is at the forefront of digital innovation, helping companies to streamline their payments systems and simplify their processes,” said Greg Keeley, executive vice president of global corporate payments at American Express, at the time.
And just months later, Amex revealed that it will extend that Apple Pay support across other jurisdictions, including Canada and Australia, this year. Next year will see commercial cards in Spain, Singapore and Hong Kong also compatible with Apple Pay.
American Express’ corporate card move may not be a fluke, either.
In October, Apple filed a patent with the U.S. Patent and Trademark Office for a technology that would allow Apple Pay users to set up different profiles of those authorized to use a single Apple Pay account.
It seems like a basic evolution of the product, but according to some analysts in Patently Apple, the technology would have the biggest impact on the corporate card world. Managers in charge of overseeing employee spend on a company card could set up different Apple Pay accounts for various employees, each with its own set of restrictions, reports hypothesized.
All of this begs the question: Will 2016 be the year the commercial card goes mobile?
[bctt tweet="Will 2016 be the year the commercial card goes mobile?"]
This year, the fleet card space was all about telematics. It’s the technology that aggregates data from all of the minute workings of a fleet vehicle: how much gas is used, where it’s used, where a vehicle stops and so on.
All of that information can be used by a fleet manager to assess how drivers are using corporate funds. And this year, fleet card issuers began to link those cards to telematics data in an effort to help fleet managers monitor spend to a more sophisticated level.
Key to this development, said fleet card firm WEX in an interview with PYMNTS earlier this year, is the ability for these cards to capture Level III data – not just where and when a purchase was made but who made it, what was purchased and why.
Soon after, WEX acquired Electronic Funds Source (EFS) in a $1.4 billion takeover deal. It was a strategic move that is likely to enhance WEX’s use of telematics. Last fall, EFS rolled out a new technology that aggregates data on fleet driver spending habits to detect rogue purchases and fraud.
A slew of other fleet card players took their telematics game to a new level this year, too.
The euroShell Card, for instance, revealed in November that it would integrate TomTom Telematics into its platform, allowing users of the Shell fleet card in Europe to access a deeper level of data regarding vehicles, drivers and driver spend.
By the end of the decade, the fleet card market is expected to reach a $35 billion valuation, according to MarketsandMarkets analysis. The reason? The ability for FinTech players to link these cards to telematics data. That’s good news for businesses running fleet operations, too. Separate research from Fleetmatics calculated that these operators can collectively save $2.2 billion in fuel costs by managing spend through the use of data on driver and vehicle behavior.
[bctt tweet="Fleet can save $2.2 billion in fuel costs by managing spend through the use of data."]
Prepaid And Payroll Cards
This space was the focus of controversy in 2015 on several occasions. The biggest, of course, was the RushCard fiasco, which unraveled this past autumn.
[bctt tweet="Prepaid and payroll cards were the focus of controversy in 2015 on several occasions."]
In October, a slew of RushCard users, many of whom are underbanked and depend on the prepaid card product to access their paychecks, could not access their funds. RushCard, owned by business mogul Russell Simmons, was quick to respond to the complaints.
“I want to personally reassure you that your funds are safe and that we are addressing every issue as quickly as possible,” Simmons said in a video statement published on his Facebook page. The company added that it would likely take a few days for customers to begin seeing their direct deposits in their online accounts, though a few weeks later, some users reported still not having access to their paychecks.
Soon after, the Consumer Financial Protection Bureau got involved. CFPB Director Richard Cordray reportedly discussed the situation with the RushCard CEO Rick Savard to ensure the proper measures were being taken in response to the problems. The CFPB’s probe of the problems is ongoing, though UniRush, RushCard's parent company, has reportedly been resistant to the investigation process.
The RushCard saga raised a broader debate in the U.S. about the use of prepaid cards for payroll, a controversial practice that critics say enforces unfair fees on users simply to access their own money.
New York state officials had taken that controversy into their hands in 2015, with the NY State Department of Labor (NYSDL) revising the rules for employers that issue payroll funds to employees via prepaid card.
According to reports last October, the body recommended that employers have to be fully transparent regarding the fees associated with prepaid and payroll cards, and employees must give consent to those practices. The revised guidelines also include requirements that employers advise their workforce on how they can access their funds without being hit with usage or maintenance fees.
New York’s action on the matter coincided with legal issues in the neighboring state of Pennsylvania this year when a judge refused to dismiss a lawsuit filed by employees of more than a dozen franchise locations of McDonald’s. The employees sued the owners in reaction to the fees associated with their payroll cards, sparking a legal debate about what constitutes “legal money” in the U.S. The case became a certified class action in May.
With that debate ongoing, New York policymakers also grappled with legal definition and interpretation, with the NYSDL proposing that the ban on “unfair, deceptive or abusive practices” to cover payroll cards, as well as any other method of employee wage compensation, including paper checks.
Innovation is continual, which means these stories will continue to develop in 2016 and beyond. Today, it appears as if commercial cards could go mobile, payroll cards could retract from controversial fees and fleet cards could grab data-fueled sophistication.