B2B Payments

Nexonia, Tallie Merger Ups T&E Competition


Competition in the corporate travel and expense management is heating up, especially as the industry embraces disruption from service providers, like Uber and Airbnb, electronic payments innovators and other technologies. Two companies in the space — Nexonia and Tallie — have decided that they have a better chance to play in the big leagues by joining forces.

Today (Dec. 15), the firms are announcing a merger, creating a company to rival the likes of Expensify and Concur.

The merged entity will be headed by Tallie CEO Chris Farrell, who told PYMNTS that, by combining forces, the company will be able to offer not only more advanced solutions to its corporate clients but support ease of use and integrations with other systems.

The combined company has yet to work out new branding, Farrell said, but is laser-focused on how to respond to industry forces that are shaping the T&E ecosystem today.

“Administrators are looking for systems that simplify the interactions with the accounting systems and other systems in the back office,” the CEO explained. “The trend is going to move towards systems much more seamlessly automated and that continue to offer deeper savings to every user within the company.”

Customer experience is a key differentiator among competitors of the T&E space today, said Farrell. But underneath that overarching theme are a few macrotrends that he said the new company will also be able to better adapt to now that the capabilities of both Nexonia and Tallie are combining.

For instance, SMEs are trending towards card payments while employees are traveling, though Farrell noted that, today, there has only been “slight” progress in this regard.

“People are using cards more and more, and the cash component is continuing to slowly erode,” he said. Propelling this shift is the demand for end users of T&E systems to be able to automatically integrate payment data into their expense management and accounting systems, which often act as major sources of friction for businesses.

Integral to overcoming that friction are banking partners, noted Farrell.

“We're seeing key trends like Silicon Valley Bank and other leading banks offering direct data to companies like ours for accessing transaction data,” he noted. “This eliminates a lot of friction for the end user.” Corporate credit cards support the demand for access to payment data, the executive added, enabling both businesses using the card and systems like Nexonia and Tallie aggregating that data to analyze and use that information for strategic purposes.

Corporate clients of the T&E companies are also floating towards card products that enable proactive spend management. Supplying a traveling employee with a company card can be more effective at managing spend than retroactively reimbursing am employee who spent his or her own money while on company time.

Historically, Farrell said, the decision to use a company card or support employee use of his or her own funds has been left up to the CFO and is based on a variety of factors, like the nature of the business and how trustworthy an employee can be.

But, he noted, the shift continues to move towards commercial cards.

“What I think will change is, as the world continues to become more frictionless, employees are likely to clamor for productivity solutions, like corporate credit cards with direct integration,” he explained. “I think we'll probably see continued advances in corporate credit card penetration, whether traditional credit cards or prepaid expense cards.”

Expense management solution providers need to be ready for that change, and a merger of Nexonia and Tallie is one way the businesses are looking to prepare.

According to Farrell, clients of both companies are expected to see an immediate impact from the merger, even within the first month, most notably in the area of customer service. Both companies have strived to offer top-notch client services, the executive said, and a combined workforce of about 165 employees means more bandwidth to handle customer needs. Other changes in how the platform runs may be felt by clients within the first six months, he added.

The name of the game, of course, is to stay competitive, and Nexonia and Tallie's strategy, it appears, is to put the end user first. Farrell said consolidation is keeping the T&E services industry on its toes, and Nexonia and Tallie are gearing up to rival other players by combining forces.

“The combined entity has the capability to deliver high-end features faster, and we believe that the consolidation trend is going to rationalize the market rather quickly from this point,” Farrell said.



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