When expense management firm Emburse launched only a year ago, the company entered the market with a commercial card service, issuing virtual and physical prepaid debit cards for specific purchases in an effort to help companies more closely manage employee spend.
But as the company has grown, so have its clients, said Cofounder Roger Gu in a recent interview with PYMNTS. And with corporate growth came new demands from customers.
It's led Emburse to introduce an entirely new business model at the company, culminating with the launch of its API that allows app developers to integrate Emburse's card-generation capabilities right into their own solutions, be it expense management, chatbots or otherwise.
Gu, along with Cofounder and CEO Peter Lai, explained why the corporate expense management space needs to evolve in a new direction.
According to Gu, a lot of the companies Emburse first began working with only had between 10 and 15 employees. Soon, however, its clients grew, with employee numbers of several dozen. Emburse's dashboard solution, the executive said, was no longer cutting it.
"Especially with contractors," he said. "We had customers in the on-demand delivery space, where they might have hundreds of contractors delivering food to restaurants." Creating an open API meant allowing these kinds of clients to be able to generate the cards they need, at the volume they need, straight from the platforms they were already using.
There are other examples, too, of clients' employees that need to procure software for the company, for example. Instead of having to go into the Emburse platform, its card-generating capabilities can be integrated into solutions like Slack, an inter-organization digital messaging tool. Gu explained that, now, if a company is using a solution like Slack, an employee can receive approval to make a purchase, and a manager can create a customized card, directly within that messaging platform.
"Those are the types of applications we're seeing that we think will be more prevalent in the future," Gu explained of where he thinks Emburse and the expense management space overall are headed.
Meeting clients' more complex needs with expense management and prepaid card solutions will be more important in the years ahead, the executives said. Lai explained that that means offering both physical and virtual cards, while Gu noted that providing value-added solutions around its card offering is also key.
For instance, some controllers within the enterprise cannot enforce a requirement that employees reconcile receipts, which can lead to a months-long process before that occurs. "For some controllers, that's really irritating," Gu said, adding that, for heavy-handed managers, Emburse offers the ability to shut down cards altogether for employees that aren't adhering to corporate policy. Virtual and debit card technology, he added, also offers more control over employee spend by establishing ahead of time the amount an employee is allowed to charge on that card.
But the executives said there is a middle ground companies need to find between all-out control over employee spend and not monitoring spend habits at all.
"There's a real balance," Gu said. "You could have an employee submit a PO request for everything, and then, you're guaranteed there isn't going to be any fraud. But that's a logistical nightmare, operationally."
He said companies need to have flexibility. "Where they're on the spectrum between minimizing [employee expense] fraud but also allowing the employees to have some leeway in expenses — [they need to] make good judgments for themselves," Gu noted.
These are all trends that expense management solutions providers have explored in their own solutions. But, Gu and Lai explained, offering up these capabilities with the added functionality of integration via API is the future of the space.
"There's an opportunity, and a general market trend, for financial institutions to actually implement platforms," Lai said, "and for third-party developers to build out applications." That, he added, is where Emburse wants to go by opening up its technology to developers.
Offering an API will undoubtedly open up new challenges for the young company. Gu said there is a "tricky" component to this, for example, with data privacy and the need to share data between platforms. But figuring that out is worth the challenge considering the alternative, contemporary hurdles associated with virtual card solutions.
Just look at the recent move by fellow virtual card solution provider Conferma, which highlighted the struggle suppliers face when they have to obtain virtual card numbers via fax.
"We have to be careful in what we disclose," he said, "but we believe there are ways to securely do so without having to rely on a fax machine, for example."