CTC Payments Branch Masterclass

Transcript

David Newington:Hi everyone. So I'm here today to talk to you about payments, particularly payments in Asia. I've only got a short amount of time, so I'm going to cover types of payments in Asia, how we use them, some of the challenges, some of the opportunities, and some of the regulation. But it's a lot to cover in 15 minutes. First thing I wanted to cover though was why. Why listen to me? It's a good question. I mean, really, who am I? So I did 10 years in a TMC on 3 countries. My last 2 years I was a GM here in Singapore, major global TMC. For the last 12 years I've been with AirPlus. AirPlus. And I opened their Australian operation for them, securing all the payment licenses, and then expanded them through Asia Pacific. And I took over as the head of Asia Pacific in 2017, securing licenses in places like Hong Kong, Singapore, New Zealand, and Japan. I believe I have a pretty good handle on how travel payment works in the region. I travel extensively, so I'm really hoping that if you have any questions, I can answer them. I've already had some great ones this morning. Right, let's go straight into it. So the first thing I wanted to get into was what we've already heard this morning is when we've asked a couple of payment questions, people don't always know what the products are or how to use them. And in Asia, we're not a corporate card market. A lot of our companies don't really want to hand out corporate cards to every traveler. Now you could argue That's because of a contingent risk. That's the risk that you create when you have a lot of balances on cards. But many other people will tell you it's just because of fear of fraud. But there are many other products. So the first thing I wanted to talk about was a lodge card. Now a lodge card is a really old product. This is a 40 to 50-year-old product. It is an account that literally gets lodged in a travel agency. And it's fantastic because you can book all of your air to it. All of your car rental, all of your high-speed rail, and your visas. And it gives you line-item detail. Huge amounts of data. Now why is that important to you? Well, for you and your travelers, it means that you can centrally pay, centrally control, and capture all of the data on the transaction both from the booking tool, from the TMC, and then place it directly into your expense management system and your finance system. Now there's a number of providers for lodge cards and if you don't operate one, it's definitely worth looking at them. The amount of data that they collect allows you every day to update your expense management system right down to the traveller level, which means that your travellers don't have to do it manually. Why is that important? Because it's a carrot. It means for those of you that are travel managers, you can drive compliance. to the suppliers of your choice because travelers don't want to fill out expenses or update. They go through the approved supplier with a lodge card. It's all automated. Nice carrot, strong compliance, strong cross-control, and you can formulate all the data. And your TMC is used to operating them because they're old tech, but they work very, very well in the environment. The next one, which is something that Nicola unwittingly gave me a wonderful tee-up for. So the next one that I want to talk about is virtual cards. It's right here in the middle. So many times have we talked about virtual cards at these conferences. I mean, I've been coming to these things for 20 years. Don't get me wrong, I love it, but we've still been talking about many of the same things. But a virtual card is often described as a credit card without plastic. But I have to tell you, it isn't. It is so much more. If you're not using a virtual card in your corporate travel program, you absolutely should speak to your provider and ask them about it. You can even start with your TMC if you're not sure how to ask your bank or financial issuer because your TMC will know. A virtual card, yes, is a payment number and it's going to be on one of the big payment schemes, but it collects all of this data at the time of booking. Allows you all of the controls that you want. You can lock that virtual card down to the geographic location, the currency, even the dates, even the specific merchant that you want for that transaction. It is wonderfully flexible. All that data that you capture at the time of booking, at the time of transaction, gets married together and goes back into your reporting. And again, Hands-off into your expense system, and even to automate your general ledger uploads. Your finance system takes this feed, helping out your accounts payable people be accurate and timely. I urge you, speak to your TMC or speak to your payment provider about how a virtual card can support you. Direct relation to Nicola's question. A virtual card is very similar to tokenization in one form. They can come in multiple forms. But there is a single-use type of virtual card. It creates a new number for each and every transaction and is never used again. That number can be generated on the fly on behalf of a traveller to pay in, for example, a payment screen. So you're never putting your corporate card or your personal card in for payment, either on a website or to a supplier. It's highly secure but transacted on the same payment rails. You have full visibility of exactly what happens with it and all of the same rights that you have with a normal credit card. Please take a look into them. I'll actually mention one more thing about a virtual card. Virtual cards can be used for non-employees. So you might have people that come to you, for example, you're a big bank or a consultancy firm, you'll have a big intern intake in a year and you've got to move all those intakes, all those interns to you. You can pay for all of their travel, including the hotels, using a virtual card. It's much easier to reconcile because you have an individual transaction and all of the data than trying to put it on the office corporate card. It's highly secure. You're not putting your corporate card everywhere. It can be processed centrally, paid centrally, but allocated out to all of the account codes that you require. I honestly urge you, please have a look at them. And you are absolutely welcome. For those of you that have known me for quite a long time in the industry, you're always welcome to ask me. I'm never going to steer you towards one particular product, but I will answer your payment questions. How much time have I got? Okay. I want to jump into corporate cards and virtual wallets. I'll just go straight to cash for a second. The reason why cash is on the screen is because we're in Asia. Many of our markets still want cash for small value transactions. They honestly do. Yeah. But it's things that are getting less and less and less. And in some local markets, places that you would think definitely still use cash, for example Vietnam, I was there last month. There's still tourists wandering around with huge wads of dong, but there's also local mobile apps. And those mobile apps are now paying for everything all the way down to roadside stalls. The problem with many of these mobile apps in some of these countries is you can't load an international card into them. So then you're looking for a prepaid or some other solution. So for a corporate traveller, it's really awkward. My point with the cash is you need to have a process to manage. What are you doing about cash? Is the person taking it out? Is the person then getting receipts and expensing it? Because it's a forex as well, you need to have a process that's easy to use for your travellers. I'll jump onto receipts really quickly with that as well and then move back to corporate cards and virtual wallets. In any sort of payment programme, your receipt is the end of it. Your receipt is what ties it all together because for expense reimbursement, you're going to need it, particularly for tax. And in a place like China, you're going to need a fapiao, not just a silly little slip that they give you at the counter. So these things are crucial to retain. You need to educate your travellers on how to get them. In some places, they must be physical. So again, if anyone hasn't got that written into their programme or needs help with it, We can definitely talk to you about it. When we say we, I mean me. Corporate cards, virtual wallets. I just want to jump into this really quickly. For those of you that are lucky enough to have a corporate card in this region, corporate cards are the ultimate in utility. They're right there in your pocket. They give you a sense of security, a sense of well-being, because you know when you check out from that hotel or when you get out of your seat at that restaurant, you can pull that bad boy out and it will work. As long as somewhere has a terminal that'll accept a corporate card, but they almost always do where our corporate travellers go, and it does give that sense of security. But as I said before, companies don't like to issue them. The other thing that I love about corporate cards is that most mobile apps these days allow you to fund the mobile app with a corporate card depending on who your issuer is. You've got your international apps, your Apple Pay and your Google Pay, that are now widely accepted across the region, even places that were hit and miss like Japan now accept Apple almost everywhere. But did you know that some of the local payment forms, for example in China, like Alipay, you can now load your international card into it? This is critical. Many people that I've spoken to don't know that you can load your international card into Alipay. And why is it so important? It's because if you're like me and you don't read or speak Chinese, when you are going to a restaurant, Or on and off the metro. Sometimes it is difficult to explain what you want or to be able to pay. And with Alipay, you just click the button, show the QR code, and the payment is done. You get a full record of the entire transaction in English and in Chinese, and you can export it. If you're using the right type of expense app, you can also scan in the receipt and tag the 2 together and then bring the fapiao home with you. Fapiao. These are critical things for your travellers because it's all about ease of use. When we send our travellers out there, we want them to feel confident. We want them to feel like they know how to get it done wherever they are, whether it's paying for a taxi, paying for a hotel or a restaurant. They want to feel that it's all taken care of. And that is really my key point on these forms of payment. It's not about choosing one over another. Thank you, David. For you that are travel managers, talk to your TMCs, ask their advice. They're very, very used to dealing with all of this. Your payment program should be set up in layers, and it's layers that allocate the right form of payment for the right type of merchant at that stage in the trip. And if you set it up right, you get your data flowing right from the front all the way to the back through the tools that you select. You get all of your reporting later on that helps you check that you're actually getting what you paid for. Your accounts payable and your finance people love you because it's accurate, it's timely, it's uploaded automatically. And your travelers feel confident when they leave home and go and visit your customers or your offices. The only last thing that I wanted to talk about was because I was asked to discuss it, is regulation. Regulation's really complex. I'm not going to get into a lot of it here today, but if anyone does want to know drop me a note, send me an email, say hi. I'll give you my current Asia-Pac sheet for it. It covers all the countries in Asia about payment regulation and how it affects travelers. But I'll give you 2 great examples. So in 2021, the Indian government was trying to push data localization, which is a real theme in Asia. And in order to enforce it, they stopped the major issuers from issuing. So American Express couldn't issue any cards. Mastercard couldn't issue any cards for 6 months straight, which was inconvenient to Mastercard and American Express, but those companies, they couldn't issue new corporate cards either. If that was your big travel program, you were now stuck. It happened again to Diners. The only person that didn't get blocked was Visa because they data-localized early, but it's an example of regulation coming back to bite corporate travelers. We've seen it again in China with PIPL. Which is very similar to GDPR but not quite the same. And it means that some forms of data can't be exported. So you might have a large travel program, but you're no longer getting the data that you thought you would because that data export has to go through a security check by the Chinese government and they approve that provider sending the data out. So you can still do it in your program, you've just got to go through the right process. Right, I'm going to close. We could talk about surcharging, we could talk about cybersecurity law, we could talk about a bunch of things, but hopefully I am leaving you today with an idea that your form of payment in travel must be more than just paying your suppliers. If you are just making a transaction to fulfill an obligation, you are leaving money, utility, and wellness on the table. Your travellers and your internal people will not thank you for it. Get the right programme, capture all of the data at every step of the way, integrate it into your systems, and automate your process. It doesn't have to be done through someone sophisticated like Airplus. It can be done through many banks, many providers. You just have to have it set up the right way. Please ask the question. We And TMCs are generally here to help you. Thank you very much for listening to me. Thank you.

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