B2B Payments

How Work-From-Home Opened A B2B Opportunity For B2C Brands

How Work-From-Home Opened A B2B Opportunity For B2C Brands

The dramatic decline in corporate travel volume is among the most dramatic trends to hit the corporate travel and expense management FinTech arena. While the impact is undeniable, a deeper look at the travel and expense (T&E) market finds additional unexpected shifts occurring, and not all of them are negative.

While the pandemic-fueled market volatility has kept chief financial officers on their toes, these professionals are looking ahead at how to adjust their T&E and employee spend strategies. As it turns out, the demographics of suppliers capturing employee spend are changing, too, and opening up new opportunities for the corporate T&E market as a whole.

That’s according to Duke Chung, co-founder and CEO of TravelBank, who recently spoke with PYMNTS about some of the most disruptive patterns emerging within a work-from-home business environment.

What started as a slow trickle in February turned into a drastic disappearance of business travel volume on the TravelBank platform by March, Chung explained. While it’s important for small businesses to develop coping strategies when travel is no longer an option, they’re also looking toward the future.

“More importantly, what happens when travel returns?” asked Chung, adding that many CFOs are taking this time to reevaluate their overall T&E strategies to prepare for a gradual return to normal volumes of business trips and employee spend.

A Strategic Opportunity

According to Chung, more CFOs are initiating conversations with T&E technology providers like TravelBank as they take this time to switch their FinTech partners and adjust their expense management strategies. In addition to changing the technology they and their employees use, small businesses are also considering new approaches to managing employee spend.

Chung pointed to the recent acceleration of corporate card innovation as one factor encouraging SMBs to take a closer look at how their employees spend money.

“Before this movement around ‘corporate card 2.0,’ we saw most people started with basic expense solutions,” he explained, noting that businesses tended to rely on employees footing the bill for company purchases, with SMBs focused on automating and streamlining the expense report management and reimbursement process.

The emergence of new commercial card FinTechs like TravelBank partner Brex has lowered the barrier for startups and smaller firms to secure a corporate card product that has historically been unattainable via traditional banks. These new products are also making it easier for companies to choose cards with rewards and features that are most appropriate for them.

Today, corporate card and employee expense programs are “being considered equally,” said Chung, though there is one consideration that smaller businesses may want to take into account when deciding which path to take.

“Corporate card use today may be different when you are growing into a larger company, because your needs are different,” he said. “That’s forcing companies to reevaluate their corporate cards.”

For high-growth SMBs, the flexibility that comes from having employees make purchases with their personal cards means firms can more easily grow and adjust their business strategies without being tied to a corporate card product, Chung added – though he noted that in today’s market, it’s more important than ever for corporates and their expense management providers to facilitate reimbursements to employees as quickly as possible.

A B2B Opportunity For B2C Brands

Just as small businesses are embracing flexibility in their business models, so are the vendors at which employees spend company cash. That’s because today’s pandemic and work-from-home framework has overhauled the spend categories appearing on expense reports, Chung said.

Instead of restaurants and rental cards, many CFOs are embracing the opportunity to ease the friction – both logistical and psychological — of having their employees work from home and maintain productivity during such emotionally taxing times. Part of that effort includes offers to cover the cost of an array of expenses, from home internet and wireless bills to home office setups, and even house plants and at-home fitness programs.

As a result, TravelBank has launched a new Work From Home marketplace and related features, collaborating with an array of vendors to negotiate discounts for the businesses that are now covering the costs of these firms’ products and services for their remote workers.

This has led to an unexpected yet potentially lucrative opportunity for the vendors themselves, which are taking this opportunity to explore the expansion of their B2C brands into the world of B2B, many for the first time.

“A lot of these providers are now able to be a part of the corporate spend, whereas a lot of these are consumer businesses built on the back of consumer spend,” noted Chung. “They have never had the opportunity to tap into corporate spend.”

It’s unclear how corporates’ and SMBs’ expense category makeup will change once work-from-home mandates ease, though Chung predicted that it’s likely in-office employee volumes may never return to pre-pandemic levels. As a result, it’s also possible these B2C brands could capture the often higher spending volumes of corporate expenses.

For T&E providers, that means new opportunities to shift course, such as introducing new features to support a continued shift in employees’ working and spending strategies.

“More important than ever, if you have remote employees all over the world, how are you able to manage their expenses in that type of environment?” asked Chung. “It will help us think more about how we innovate to support this.”

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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