Catalyzing Corporate Card Adoption Through Value-Added Features

Corporates large and small today have more choice than ever before when it comes to corporate card products.

With some of the largest names in card technology recently investing in elevating their corporate and small business offerings, combined with the emergence of new FinTechs operating in this space, commercial card innovation has taken off.

But what’s driving adoption of these new financial technologies? According to Ashkan Rajaee, co-founder of Hub-Suite, which operates corporate card solution SpendHub, it’s all about managing spend.

High-level spend control is priority No. 1 for businesses in search of a new card solution, he told PYMNTS in an interview, noting that organizations need greater transparency and control in how company money is used.

But corporate cards do not inherently provide the kind of spend management capabilities business seek. Rather, it’s value-added services and functionality that are able to fill this gap. As Rajaee discussed, the opportunity to integrate key features with physical and virtual card solutions will be important factors to the success of players in an increasingly crowded and competitive market. And, he said, they can help proliferate use of cards within the enterprise beyond employee expenses.

Expanding Usability

Corporate card technology has plenty of opportunity to introduce value-added features enticing enough for businesses of all sizes to adopt new payment products.

Organizations need transparency into employee transactions on company cards in near real time, said Rajaee, while managers are also seeking additional ways to reap the most out of a card program through solutions like rewards or access to software products.

In SpendHub’s case, that means connecting corporate customers to spend management and analytics features in addition to “perks” like video conferencing and streaming services, for instance.

But there are other factors beyond those extra services that corporates demand in a card solution today. With businesses prioritizing fraud control and ease-of-use, Rajaee said virtual card solutions are quickly evolving to create features not necessarily possible through other payment methods, or even through a physical card.

Support for mobile wallets like Apple Pay, for example, aren’t only about convenience.

“The main thing for corporates is fraud,” said Rajaee. “Biometric hardware on mobile devices means it’s harder for someone to pick up a phone and replicate a fingerprint or face to conduct a transaction — whereas if someone loses their wallet, they can just take the card and swipe it.”

Virtual cards, combined with features like spend limits, are also growing in popularity as more organizations procure subscription services that require repeat payments that can automatically alert managers if prices increase or if spending goes beyond allocated budgets.

Overcoming Friction

While opportunities to add value to physical and virtual card products, from rewards to spend control to security, are vast, adoption of the corporate card remains relatively low compared to more popular methods like ACH and checks. That’s especially true in the accounts payable (AP) department, where Rajaee said plenty of inertia exists against any change in payment behavior.

“I don’t think this friction and these barriers are going to be easily removed until, one by one, each user tries it out and experiences it,” he said. “Especially if you’re a large company, that’s a really big decision.”

Overcoming that inertia must involve cooperation between the CFO, CEO, COO and CIO, he added, and each has their own requirements when it comes to adopting a new payment technology.

Yet as more businesses embrace card products to empower employees to spend more conveniently — and empower managers to obtain greater control and visibility into that spend — they may face less resistance in their AP departments to try the same technologies. With opportunities to open up new revenue streams through rewards programs also driving adoption, AP leaders could also view cards as a particularly valuable and attractive opportunity.

“As people get to experience the functionality, flexibility and control of virtual cards, and of having systems to control spend, it’s going to far outweigh the delays and processing of paper checks,” said Rajaee. “But that will really only happen as people adopt the technology.”