1. Corporate Travel Automation & the Opportunity for Commercial Card Solutions
November 7, 2012

2. NVBTA Travel Automation & Cards
Introductions
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3. NVBTA Travel Automation & Cards
Introductions
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4. NVBTA Travel Automation & Cards
Corporate Travel Automation
Organizations are automating travel management to streamline processes.
Lower
performance
Average
Best
travel policy
preferred supplier
agreements
travel agency
corporate card
reporting solution
expense solution
online booking
Automation also improves visibility, traveler compliance to policy, and ability to negotiate discounts.
Source: “Globalization of Corporate Travel Programs,” AirPlus survey of ACTE buyers (2011). “European Expense Management Study,” Amex & A.T. Kearney (2008).
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5. NVBTA Travel Automation & Cards
TMCs & Travel Card Usage
Almost everyone with >$1 mil in travel has a TMC. Walking card usage rises with spend.
Annual Travel Spend:
Source: Corporate Travel Policy: Benchmarking and Insight, prepared by TRW Travel & Expense Management LLC, July n = 689 U.S. and Canadian organizations.
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6. NVBTA Travel Automation & Cards
Individual vs. Corporate Liability
Meanwhile, liability structures are drifting further towards corporate.
Legend:
Card Issuer
Cardholder
Client
Approves
Cardholder
Sets
Credit Line
Bill
Goes To
Payment
Made By
Guaranteed by
Walking Travel Card
Individual liability
Issuer must check credit
Issuer offsets rebate
Corp liability / individual pay
Client invoiced if
cardholder goes
120 days past due
Corp liability / corp pay
when expense
report approved
Other Cards
CTA / travel agency lodged
Purchasing
ePayable / virtual
Source: First Annapolis Consulting market observations; RPMG Corporate Travel Card Benchmark Survey Results.
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7. NVBTA Travel Automation & Cards
Travel Card Benchmarking
Market averages can be used to benchmark your travel card program.
(note: bars indexed to 100% in each category)
# of cards Annual Spend
5,623 $55 mil
755 $10 mil
178 $2.8 mil
Note: figures are rounded.
Source: RPMG Corporate Travel Card Benchmark Survey Results.
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8. NVBTA Travel Automation & Cards
B2B Spend by Form of Payment
A summer st Annapolis survey shows travel cards and CTAs lead for travel spend.
Q3/4/5: What is your best guess of the approximate $value breakdown by payment method for ...
B2B spend riding on commercial card network rails:
defined herein as spend not related to direct operations - office supplies, computers, telephones, etc
defined herein as spend related to direct operations - raw materials, delivery, etc, but explicitly excluding payroll
Notes:
For Travel Spend, meeting cards were less than 2% and prepaid was less than 1%. Both payment methods were combined into commercial cards (plastics issued).
For Direct Spend, SEPA accounted for 1% and was combined with ACH.
Virtual / Ghost Cards includes travel agency lodged / central accounts as well as ePayables solutions that ride the p-card rails.
Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America.
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9. NVBTA Travel Automation & Cards
Travel Spend by Form of Payment
Segmentation shows some remaining bastions of personal card and check usage for travel.
Q3: What is your best guess of the approximate $value breakdown by payment method for Travel
manufacturing
wholesale
retail
gov / education
non-profit
utilities
Notes:
Minor adjustments were made to Comm’l (Plastic) spend percentages to eliminate rounding errors.
For Travel Spend, meeting cards were less than 2% and prepaid was less than 1%. Both payment methods were combined into commercial cards (plastics issued).
Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America.
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10. NVBTA Travel Automation & Cards
Drivers for Card Usage & Growth
This survey also revealed key drivers for selection and use of commercial cards.
Q: What are the reasons for credit / payment card use in your organization?
Q: What would be the key factors in increasing usage of credit cards?
Q: What weighting / importance do you assign to the following factors in selecting card issuers?
Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America.
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11. NVBTA Travel Automation & Cards
Drivers for Card Usage & Growth
Organizations who put more travel spend on cards / CTAs realize more value-add.
for respondents that place 70% or more of travel spend on travel cards or CTAs, one-third would say data & reporting capabilities drives 20-39% of the reasons why they use cards.
for 70%+ respondents, one-third would weight improving control & compliance as 40-59% of the rationale for increasing usage
Q: What are the reasons for credit / payment card use in your organization? (all responses must sum to 100%)
Q: What would be the key factors in increasing usage of credit cards? (all responses must sum to 100%)
Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America.
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12. NVBTA Travel Automation & Cards
Mobile Transaction Authorization
Mobile authentication for corporate travel payments is quite limited, but likely to grow.
Source: "Mobile Payment - How It Will Transform Corporate Travel and Expense Management," AirPlus, April Based on global 2012 survey of ACTE buyers.
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13. NVBTA Travel Automation & Cards
Mobile Applications for Travel
Mobile apps are also niche; but fundamental to further enhancing traveler productivity.
Source: “Expense Management for a New Decade,” Aberdeen Group survey of respondents from EMEA (23%), N.A. (67%), AsiaPacific (6%), and South/Central America (4%) (March 2011).
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14. NVBTA Travel Automation & Cards
About First Annapolis
First Annapolis is a specialized consulting firm focused exclusively on payments.
Client Payment Strategy
Background:
Founded in 1991; privately held
Headquartered in the Baltimore area
Professional Staff:
75+ professionals
Balanced combination of industry, functional, and consulting experience
Service Offerings:
Management consulting and M&A advisory services
Practice areas aligned with all payment products and services
Clients:
Card partners (retailers, autos, airlines, hotels, affinity groups, etc.)
Banks and specialty finance companies
Payment networks
Processors and service providers
Trade and government organizations
Emerging payment providers
Card
Issuing
Debit / Prepaid
Commercial Payments
Merchant Acceptance
Strategy Development / Support
(strategic planning, benchmarking, diagnostics, business casing)
Partnership Finance
(retail, travel, entertainment, oil, auto, affinity, agent)
Management Consulting
(strategy, market research, business casing, partnerships, implementation)
(acquisition / divestiture strategy, buy / sell-side representation, transaction support)
M&A Advisory
Loyalty Program Support
(platform/delivery, integration, implementation)
Strategic Sourcing
(insource vs. outsource, feature / functionality, vendor selection)
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15. NVBTA Travel Automation & Cards
First Annapolis Contact
First Annapolis Consulting | M&A Advisory Services
900 Elkridge Landing Road, Suite 400
Linthicum, Maryland
USA
Lauriergracht 138
1016RT Amsterdam
The Netherlands
Frank Martien
Partner
(410)
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16. NVBTA Travel Automation & Cards
Moderator Script & Questions
Now that we’ve caught a glimpse of some current trends in corporate travel automation, let’s ask the experts. Bill, if I could start with you, (1) could you describe some of the ways TMCs are facilitating more automated or sophisticated use of CTAs or walking cards? [allow Bill and other panelists to address question]. Now, Robin (2) what are some best practices you’re seeing with regards to travel spend data consolidation, reporting, and analysis - and - how are organizations creatively using this data to their benefit? [all panelists address question]. Terry, (3) what trends are you seeing relative to TMC and travel card mandates; and what are some best practice examples that come to mind? [all address question]. Bill, as you reflect on the panelists’ input, (4) what advice would you give to a client regarding how to identify and position an internal executive champion to push an organization towards further corporate travel automation? [all address question]. Robin, (5) over the next five years, what tangible benefits will mobile deliver for corporate travel automation / how will the business case be made? [all address question]. And Terry, do you see banks, card networks, TMCs, or all three types of providers, leading the charge in mobile - or - will mobile be driven mostly by players outside of corporate travel? [all address question]. Finally, Bill, what form of corporate travel automation have we NOT discussed that we’ll start reading about within five to 10-years’ time? [all address question]. And, Robin, what’s in store for us regarding future convergence of corporate travel management and payment practices across geographic markets? [all address question]. Terry, should M&A be on the radar; and what sort of business combinations up and down the value chain could impact corporate travel automation and payments?
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