Defining the Value of a Commercial Card Program - MAAFP Defining the Value of a... · Defining the...

CONFIDENTIAL: This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior approval by First Annapolis Consulting, Inc.

Prepared for:

Defining the Value of a Commercial Card Program

May 18, 2016

First Annapolis Consulting, Inc. | Confidential | 2 MAAFP - May 18, 2016

By way of brief introduction, First Annapolis is the leading advisory firm in payments.

About First Annapolis Defining the Value of Commercial Cards

• ~70 professionals

• Office Locations:

– Annapolis, MD

– Amsterdam, The Netherlands

Financial Institutions

Merchant Partnership

Finance

Payments Strategy and Innovation

Bank Card

Debit/ Prepaid

Commercial

Acquiring

Networks

Platforms

Co-Brand

Private Label

Agent

Mobile

Innovation

Alt. Lending

Mergers and Acquisitions

Strategic Sourcing

Enterprise Payments Strategy

Expertise

Functional Specialties

Mobile Payments and Innovation

Practice Areas

Portfolio & Risk Management


Five trends are driving disruption, competition, and value in commercial cards.

Key Trends Defining the Value of Commercial Cards

1. Growth and interchange regulation have enhanced your providers’ C-level focus on their commercial card programs.

2. The investment community has also been educated on virtual cards.

3. Clients are being increasingly sold on business process automation.

4. Breaches are a threat to client confidence and supplier acceptance.

5. Proliferation of APIs should:

a) Dramatically enhance your ability to automate AP and AR; and,

b) Increasing expectations for providers, networks, and processors.

These are but a few of many trends impacting value drivers for commercial cards.


Corporate travel, purchasing, and virtual cards are on continuum of payment card types.

Card Payment Types Defining the Value of Commercial Cards

Consumer

Prepaid Card (1)

Credit Card (1)

Pay Before

Carry a Balance

Retail Travel / Food Fuel / Repairs Maintenance Recurring Other

User:

Terms:

Product:

Spend:

Debit Card

Pay Now

Small Business

Prepaid Card (1)

Credit Card (1)

Pay Before

Carry a Balance

Debit Card

Pay Now

Travel Costs Non-travel Costs

Purpose:

Prepaid Card

Mid-Market / Large Corp / Fortune 500 / Multinationals

Corporate Travel Card

Pay in Full Later

P-card

Airline (2) Hotel Car Rental Meals Taxi Parking

Payroll Gift Cards Incentive

Pay Before

Fleet Card (1)

Virtual Cards no plastic (3)

Indirect: - Office supplies - Catering - Misc.

Fuel Repairs

Direct: - AP-based - Invoiced - COGS - Inventory

Travel Expense

Mgmt

Low Ticket Process

Efficiency

Fleet Mgmt

B2B pmts Integration

with AP/ERP

Paper Payment Removal

(1) May be general purpose (i.e., accepted at card accepting merchants) or private label (i.e., only accepted at a designated merchant that sponsors the private label program). (2) May also be paid with a non-plastic issued corporate travel card based solution called a central travel account (“CTA”). In Amex’s vernacular, this is called a business travel account or BTA. (3) “Virtual cards” is synonymous with vcards, virtual accounts, epayables, EAP, and other common terms for non-plastic purchasing cards accounts often integrated with accounts payable and/or ERP systems.


Electronic payments are expected to continue gaining share of U.S. B2B payments.

U.S. B2B Payments Forecast Defining the Value of Commercial Cards

1% 2% 2% 6% 6% 7% 7% 7% 6%

16% 18% 19%

69% 67% 65%

2012 2015 2018f

Mid-Market ($20 -$500 mil)

1% 1% 2% 5% 5% 7%

10% 11% 12%

30%

36%

43%

54% 46%

37%

2012 2015 2018f

Large Corporate (>$500 mil)

(1) Figures in millions of U.S. dollars refer to annual revenue at the organization / survey participant level. Percentages in graph are % of transactions of the ~$20 trillion U.S. B2B payments market. 2018 forecast for cards based on the weighted average future look in next 3 years. 2018 forecast for EFT and checks presumes a continuation of the percentage point change in share for each form of payment from 2012 to 2015.

(2) Virtual card is synonymous with vcard, virtual card, virtual account, epayables, EAP, and other IP-protected or commonly used terms for non-plastic purchasing cards accounts often integrated with accounts payable and/or ERP systems.

Source: “2015 Treasury Management Monitor™ and Service Quality,” Phoenix-Hecht, November 2015. First Annapolis projections; Visa, MasterCard, and Amex annual reports, SEC filings, and investor presentations; UATP press releases; The Nilson Report, GSA SmartPay 2 Program Statistics, 2013 RPMG Corporate Travel Card Benchmark Survey Results; U.S. Census data.

% of U.S. Payment Transactions Made (1)

$124 $131 $138 $142 $146 $151

$184 $197 $215 $234 $254 $274

$49 $67

$87 $107

$132 $162

$357 $395

$440 $484

$532

$587

2013 2014 2015 2016 2017 2018

U.S. Commercial Card Spend ($ billion, for $10+ mil revenue orgs)

Virtual Card (2)

Distributed p-card

Corporate travel cardCheck

ACH

Wire

Distributed Card Virtual Card (2)


Defining the Value of Commercial Cards

Virtual cards can automate and accelerate procure-to-pay / order-to-cash processes. Virtual cards can be SIP or BIP. Within SIP or BIP, virtual cards can be single use or a supplier dedicated card #s.

Virtual Cards Defined

Supplier

1

Invoice presented /

receipt 4

Issuer sends account number with pre-authorized transaction amount and expiration

3A

Buyer authorizes Issuer to create a virtual card for a supplier*

3B

ERP / AP System Approval process / generate

payment file

2

Supplier presents virtual card to Acquirer

5

Acquirer pays Supplier

6

Issuer pays Acquirer 7

Consolidated Monthly Statement sent to Buyer

Buyer

8

Buyer provides virtual card instructions to

Supplier

Supplier Initiated Payment (SIP or “Pull”) Buyer Initiated Payment (BIP or “Push”)

Supplier

1

Invoice presented /

receipt

ERP / AP System Approval process / generate

payment file

2

Buyer

8

Consolidated Monthly Statement sent to Buyer

6

Acquirer pays Supplier

Issuer pays Acquirer 7

Buyer initiates payment directly with Supplier’s Acquirer via virtual

cards (Skip to Step 6) 3

*A buyer may request a virtual card either via a web portal or using a more automated vendor payment file


Virtual cards have become more commonly used for transactions into the six figures.

Virtual Cards Defining the Value of Commercial Cards

17%

21%

18%

8%

27%

13%

6%

3%

13%

17%

20%

24%

2%

2%

6%

10%

41%

47%

50%

55%

< $2.5K

$2.5 - 10K

$10 - 100K

$100k - 1 mil

% of Transactions Paid For Virtual Card Users

Virtual card Plastic ACH Wire Check

Source: “2015 Electronic Accounts Payable Benchmark Survey Results,” RPMG Research Corp, July 2015.

Tran

sact

ion

A

mo

un

t


Fundamentally, commercial cards are business process automation tools for clients.

Business Process Automation Defining the Value of Commercial Cards

EU regulation of commercial card interchange could catalyze convergence of the above.

Pre-Trip In-Trip Post-Trip

Solution (Booking Engine) (Mobile Travel Apps) (Expense / Reporting)

Traveler

• Plan / Book Travel • Purchase Travel

(Plastic / CTA / Virtual Card)

• Incur Travel Expenses (Walking Plastic)

• Log Expenses / Input Receipts

• Review Statements • Submit Expense

Report • Pay Issuer (Plastic)

Manager • Approval / Decline

Travel Requests • Duty of care

• Allocate Cost to G/L Codes

• Process / Approve Expense Report

Program Admin.

• Establish Corporate Travel Policy / Set Card Controls

• Negotiate Rates with Preferred Vendors

• Troubleshoot Traveler Issues

• Audit Expenses • Reimburse Traveler • Pay Issuer (central

billed account)

Card Issuer

• Enable Card Controls • Consolidate Data for

Negotiations

• Approve / Decline Card Transactions

• Authorize / Rationalize Multiple Currencies

• Concierge services

• Aggregate Level III / Enhanced Data

• Generate Billing Statements

• Program Performance Reporting

Green denotes roles of card-based products.

Corporate Travel (typically pay ahead)

Source: First Annapolis Consulting research and observations.

Procure-to-Pay (pay on approved invoice)

Buyer Supplier

Accounts Payable (AP) Accounts Receivable (AR)

Purchase Request Credit Approval

Goods Delivered Goods Sent

Invoice Receipt Invoice Developed

/ Presented

Approval / Dispute Dispute Mgmt.

Collections

Payment Initiation

Payment Receipt

Payment Reconciliation

Payment Application Reconciliation

1

2

3

4

5

6

7

Purchase Order

Packing Slip

Packing Slip

Invoice Invoice

Dispute / Credit

Dispute / Credit

Payment Instructions

Remittance Information

Recon. Report

Recon. Report


Virtual Card Capabilit ies Defining the Value of Commercial Cards

(1) Dynamic funding is the ability to authorize only exact purchase amounts for individual virtual account transactions (e.g., specific suppliers, dates) where the purchase amounts may be continuously changed in real-time in the online solution.

(2) Integration of Level III (transactional line item) data that is not automatically captured in a transaction, but may be manually added to a transaction (e.g. ,project bill codes, cost center tags). Note: Not a comprehensive list of features / functionality.

• New account requests

• Applications / activation

• Virtual account / account maintenance

• Account settings

• Account management via internal systems

• Hierarchy configuration

• Payment authorization / decline notifications

• User interface

• Account alerts

• Online bill payments

• Customer support

• Velocity limits (spend / txns)

• Merchant category code restrictions

• Tax rules

• Authorization / decline queue

• Dynamic funding (1)

• single-use numbers

• Buyer initiated / push payments

• Tolerance ranges for transaction authorizations

• Supplier payment addenda

• Control of interchange rate

• Virtual account data auto-population

• Integration of non-card spend

• Integration of Level III / addendum data (2)

• Data extract to GL / financial systems

• Full integration with buyer AP system

• Integrated payables (harmonization of capabilities across B2B payments)

• Data extract customization (formatting and scheduling)

• Standard / custom reports

• Drill-down reporting (by geography / MCC / suppliers)

• Report schedule / format

• Multiple tax / language / currency support

• Dashboards / program analysis

• Customizable rules

• Out-of-policy spend alerts

• Program optimization tools

• Program benchmarking

• Budget analysis

• Supplier enrollment team

• Supplier segmentation

• Supplier outreach

• Ongoing supplier support

• Merchant directory services

• Supplier portal for online supplier access

• Integration with supplier’s internal systems

• Remittance data / payment instructions provided to suppliers

Set Up Control Integrate View Collaborate

with suppliers

Virtual cards can provide substantial business process automation support in AP.


A key objective for streamlining B2B processes (e.g., STP)(1) is reducing invoice cost.

Cost Savings in A/P and A/R Defining the Value of Commercial Cards

(1) Straight Through Processing, which means an automated electronic workflow of invoice-related processes that frees an operator to focus on monitoring, reporting, and exceptions. (2) The term “Codify” is not further defined in this survey. Codify is presumed to include, for instance, activities such as data input or transfer on received invoices. Source: “Supplier-Initiated EIPP: Impacting the Entire Invoicing and Payment Lifecycle,” PayStream Advisors, Q3 2014.

$5.66

$0.73

$0.58

$6.53

$4.35

$3.19

$1.45

$16.11

$6.38

Paper Electronic

Supplier Preparation of Invoice & Reconciliation of Payment

Archiving

Remittance &Cash Mgmt.

PaymentReminder

Printing &Mailing$1.59

$4.35

$0.58

$5.80

$1.74

$3.63

$2.90

$6.96

$4.21

$3.19

$1.16

$25.52

$10.59

Paper Electronic

Buyer Receipt of Invoice & Payment

Archiving

Payment

Dispute Mgmt.

Validate &Match

Codify (2)

Receive


Rebates have been rising; however, a wide range of pricing persists and implies clients strongly value factors beyond rebate in choosing or choosing to stay with their providers.

Rebates Defining the Value of Commercial Cards

(1) The category ‘Receive a Rebate’ refers to the percentage of those large market end users that are currently using a p-card that receive a rebate. Note: Mid-market is defined as end-users with annual sales between $20 and $500 million. Large market is defined as end-users with annual sales greater than $500 million. Source: 2012, 2014, and 2015 Phoenix-Hecht Treasury Management Monitor reports. The percentage of recipients “Currently Using a P-Card” was not presented in the 2015 survey.

18

%

7%

28

%

24

%

24

%

7%

5%

32

%

27

%

28

%

12

% 6%

22

%

24

% 36

%

< 50 bps 51-75 bps 76-100 bps 101-150 bps > 150 bps

Large Market Rebate Spread

Large market rebates have also been on the rise, with over a third receiving rebates > 150 bps, along with a significant reduction in end-users with rebates < 100 bps since 2011.

22

%

75

%

35

% 61

%

(n/a

)

66

%

Currently Using a P-Card Receive a Rebate (1)

Mid-Market Rebate Frequency

64

%

82

%

49

% 8

9%

(n/a

) 91

%

Currently Using a P-Card Receive a Rebate (1)

Large Market Rebate Frequency

25

%

8%

34

%

14

%

19

%

20

%

5%

41

%

15

%

20

%

19

%

6%

37

%

11

%

28

%

< 50 bps 51-75 bps 76-100 bps 101-150 bps > 150 bps

Mid-Market Rebate Spread 2011 2013 2015

Mid-market p-card users receiving rebates are earning, on average, a higher rebate than they did 2 years. These users are

commonly found earning between 76 and 100 bps on spend.


Card-based payments can be challenging to set up but are often advantaged afterwards.

Card v. Other B2B Payment Types Defining the Value of Commercial Cards

Card ACH Check Wire

Payment Set-up

Process / Effort

Updating Vendor Information

Payment Details / Accounting

Payment Risk / Fraud

Payment Float

Payment Cost Rebate Free - $.25 $3.67 - $8 $20-$35

Source: “7 Pros and Cons of B2B Payment Options,” AOC Solutions, July 24, 2014.

Advantageous Disadvantageous Neutral


Published time-series data on U.S. B2B card acceptance rates suggest a ±2.4% average.

Supplier Acceptance Defining the Value of Commercial Cards

Source: Trends from www.myrealrate.com.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2008 2009 2010 2011 2012 2013 2014 2015

Average Real Rate By Industry Over Time (analysis of real rates from 80,000 real merchants)

Medical

Restaurant

B2B

Lodging

Retail

Card NotPresent

B2B Rate

2.90% 2.68% 2.91% 2.40% 2.42% 2.37% 2.34% 2.45%

Contributing factors to the decrease in B2B acceptance costs likely include:

1. Increasing usage of virtual cards for larger ticket sizes has driven more awareness of card acceptance costs.

2. B2B merchants are becoming more sophisticated about acceptance pricing (e.g., replacing bundled with interchange plus pricing).

3. Growth in large ticket interchange qualifying transactions has lowered the all-in effective acceptance rate.


Suppliers’ problems with payments cost them revenue - often well in excess of swipe fees.

Supplier Enablement Defining the Value of Commercial Cards

% Lost

% of Suppliers

COGS (2)

Revenue Lost ($ billion)

<.1% 19%

$15 trillion

$0

0.5% 19% 14

1.0% 16% 23

1.5% 8% 18

2.0% 11% 31

2.5% 6% 23

3.0% 6% 27

4.0% 1% 6

5.0% 10% 72

8.0% 1% 12

10.0% 3% 48

Total Annual Lost Revenue $278

Invoiceable Revenue Lost per Year Due to Problems with Buyers / Payments (1)

(3) Respondents were permitted to list multiple reasons for late payments in their responses. Source: “Atradius Payments Practices Barometer,” Atradius, September 2014.

18%

27%

27%

28%

28%

29%

30%

31%

38%

Invoice sent to wrong person

Formal insolvency of the buyer

Dispute over quality

Inefficiencies of the bankingsystem

Complexity of payment procedure

Incorrect information on invoice

Payer using outstanding debts asform of financing

Good / service doesn't correspondwith contract

Insufficient availability of funds

Main Reasons Reported for B2B Payment Delays from Suppliers Surveyed (3)

(1) Problems include short payments, late payments, out-of-time discount claims, tax disputes, contract disputes and unrecoverable debts.

(2) 2012 IRS TaxStats data for cost of goods sold for companies with over $10 million in annual revenue. Source: “Automating AP / AR Financial Processes,” AIIM (Association for Information and Image Management) / ASG Software Solutions, 2014. “SOI Tax Stats – Table 5 – Returns on Active Corporations,” IRS, 2012 as found on the IRS website on May 1, 2016.



Client Master Vendor File

ACH

Check

Virtual Cards

Wire

An

nu

al S

pe

nd

pe

r V

en

do

r

Ave

rage

Tic

ket

Size

B2B Payment Type

Buyer Inputs / Industry Assumptions

Spend Characteristics

Spe

ed

/ T

erm

s o

f P

aym

en

t

Ind

ust

ry o

f B

uye

r /

Sup

plie

r

A/P Spend Before…

…vs. After

Potential Savings

Optimizing how you pay your vendors may warrant a detailed analysis of your vendor file.

Vendor Payment Optimization



Paving the proverbial last mile is a mecca for virtual cards. Boost promotes “Intercept” to convert SIP virtual card payments into a BIP payment experience for suppliers.

Supplier Enablement

Promoted Advantages for Supplier

1. No need to support multiple virtual card platforms

2. No need to login to multiple portals, extract card data and manually process payments

3. No need to store/pass/process card data

4. Reduce PCI DSS compliance scope and cost

5. Lower cost with access to lowest interchange rates

6. Reduce manual steps from relying on e-mailed PDF notifications

7. Streamline ERP requirements with customized remittance data in native format

8. Eliminate manual and lengthy reconciliations improving efficiencies and visibility

Source: Boost website.

Boost Intercept

Suppliers no longer have to manually process virtual card payments, regardless

of their buyer’s payment type.


Fraud is a big challenge for clients and a significant driver of payment centralization.

Compromises & Reissuance Defining the Value of Commercial Cards

Control / fraud

prevention 29%

Internal cost reduction

27%

External cost reduction

18%

Improved visibility

16%

Error reduction

6%

Consolidate banks

4%

Most Significant Driver of Payment Centralization

(for organizations with $1+ billion in revenue)

Source: “SunGard B2B Payments & Bank Connectivity Study - Innovations to Overcome Complexity-Driven Fraud Exposure & Cost Increases,” SunGard Data Systems Inc., May 2, 2014, N = 398.

10%

25%

27%

34%

77%

ACH credits

ACH debits

Wire

Credit / debit cards

Check

% of Organizations Subject to Fraud by Payment Type (2)

(1) All respondents were buyers (i.e., not suppliers). (2) Respondent pool consisted of only those organizations that said that they were the target of fraud in 2014. With

some respondents listing multiple types of fraudulent payments, the sum of percentages is greater than 100%. Source: “Payments Fraud and Control Survey,” Association for Financial Professionals, March 2015.

No 38% Yes

62%

Was Your Company the Target of Payment Fraud in the Past Year (2014)? (1)

Any payment centralization can involve bank treasury relationship consolidation.


An early 2014 NAPCP poll of program administrators suggests breaches can impact usage.


(1) To date, has there been an impact on your program? Source: “Impact of Recent Data Breaches” NAPCP opinion poll, February 7 - 21, 2014, n=108.

3%

50%

47%

Impact to card usage ofdata breaches (1)

No impact

Someimpact

Significantimpact

Selected Verbatim Quotes:

• About 5% of cards were compromised.

• The hassle of resulting fraud charges was horrible. Lots of admin paperwork and hoops to jump through.

• Four of our 335 cards were compromised, and we cancelled an additional 30 recently used @ Targets.

• On a pre-emptive basis, our bank replaced 28 cards used at Target - of which fraud attempts were subsequently made on six cards.

• We, in a proactive manner, tightened our controls.

• Provider spots fraud attempts regularly and contacts employees or program admins for verification.

• We get 100% back on external fraud as long as it is reported within contract time lines and the paperwork is returned in time.

• Luckily, our bank is catching the fraud so we are not charged for them.


An early 2015 poll shows pervasive reissuance and much pain for clients.


(1) Has your organization been inconvenienced with having to re-issue Commercial Cards during the last 12 months because of various data breaches? (2) If so, approximately how many cards has your organization had to re-issue during the last 12 months due to a breach? (3) Inclusive of “not applicable” responses. Source: “How Have Recent Data Breaches Impacted Your Program?” NAPCP opinion poll, January 30 - February 20, 2015, n=124.

94%

6%

17%

38%

20%

21%

4%

Breach reissue(1)

Cards reissued(2)

Selected Verbatim Quotes:

• Our bank does a good job in blocking accounts with suspected fraud before it posts to our accounts.

• We block all international transactions on our cards.

• EMV does not offer much protection against the biggest source - online/CNP transactions.

• Providers should make mobile alerts standard.

• We have closed 413 of our 1,400 p-cards during the past year due to third party compromises.

• It is a hassle to get replacement cards.

• We have had some cards replaced up to 4 times.

• The act of replacing a card needs to occur within the constraints of the cardholder and on their schedule.

• We have been struggling to streamline approach.

• The current fraud situation has created a distrust of the credit card payment process in my organization.

no

yes

501+

101 to 500

51 to 100

11 to 50

<10 (3)


How you and other clients interact with your providers will continue to go digital.

Digital Defining the Value of Commercial Cards

32%

11% 6% 7%

32%

7% 5%

16%

84%

% Anticipating Ownership Change for businesses of $100k to $10 million

Q: Within the next five years, what are the plans for your company’s ownership?

Change Anticipated

No Change Anticipated

50% 50%

Source: Barlow Research “Effective Service Through Digital Channels will be Imperative for Retaining Younger Business Owners in the Near Future,” Feb 2016

Branch 23%

Bank officer 4%

ATM 8%

Web for info 13%

Web for txns 34%

Mobile 14%

Other 5%

% of Monthly Contacts for businesses of $100k to $10 million

< 45 years old

65+ years old

< 45 years old

65+ years old


A number of emerging technologies in U.S. B2B payments have been disrupters.

B2B Payments Disruptors Defining the Value of Commercial Cards

Description Examples

Mobile Payments • Enabling corporate card mobile payments through major

mobile wallet providers

Enhanced Mobile Functionality

• Adding the ability to suspend / cancel cards or delegate account access via mobile application

Open API Development

• Engaging end-users in online solution API development

End-to-End ERP Integration

• Integrating payment systems with both A/P and A/R systems for a fully automated payment process

Dynamic Discounting • Software solutions that allow for “sliding-scale” early payment

discounting agreements between buyers and suppliers

B2B Marketplaces • Connecting suppliers and buyers in an online marketplace,

facilitating the payment process

Integrated Receivables • Centralized systems for receiving B2B payments and

automating payment acceptance rules

Electronic Invoicing • Integrating electronic invoices and online payment solutions

Closed-Loop Processing

• Allowing buyers and suppliers with frequent transactions to make direct payments, bypassing card rails

(fleet)

http://www.usbank.com/index.html


In a late 2015 poll, only one-third of organizations said they would use mobile payment apps. Multiple issues must still be addressed.

Commercial Card Mobile Payment Defining the Value of Commercial Cards

Question: If mobile payment apps (e.g., Apple Pay and Samsung Pay) were made available for the Commercial Card industry, would your organization use payment apps? Source: Survey Results: Weigh in on Mobile Payment Apps for Commercial Cards, NAPCP, November 20 - December 11, 2015.

Issues to be addressed:

• Perception of low usage rates among consumers

• Limited IT resources to get up and running

• Vendor, location, level 3, tax exempt data capture

• Operator error - use travel card for personal purchase

• Open floodgates of phone, plan, data reimbursement

• Government cards can’t go on personal phones

• Security / future of encryption (FBI / Apple case)

• Advantages beyond reaching for phone vs. card

29%

17%

54%

Would you use mobilepayment apps?

Not sure

No

Yes

First Annapolis Consulting, Inc. | Confidential | 23

Cloud-based e-invoicing / dynamic discounting / expense management

• Through a no-fee Coupa supplier portal, suppliers have real-time visibility into their invoice and payment status.

• Suppliers can see approved invoices; however, buyers control timing of payment.

• Suppliers can activate or disable a feature through which they automatically receive early payments on their approved invoices - the moment they’re approved - in exchange for discounts predetermined in the Buyer’s ERP.

MAAFP - May 18, 2016

B2B payments are moving towards integration with source-to-settle / order-to-cash.

E-Invoicing Defining the Value of Commercial Cards

Virtual card solutions

Pu

rch

ase

R

eq

ue

st

Go

od

s D

eliv

ere

d

Go

od

s Se

nt

Invo

ice

In

itia

ted

In

voic

e

Re

ceiv

ed

Ap

pro

val o

r D

isp

ute

D

isp

ute

M

anag

em

en

t

Pay

me

nt

Init

iati

on

P

aym

en

t R

ece

ipt

Pay

me

nt

Ap

plie

d

Bu

yer

Pay

me

nt

R

eco

nci

led

Sup

plie

r

Cre

dit

A

pp

rova

l

Co

llect

ion

s

Source: http://www.coupa.com/software/suppliers/suppliers-invoicing/; Supplier Integration Guide, July 2010 Release, Coupa; Taulia CashFlow video found at http://www.taulia.com/en/products/supplier-finance.

for example regarding e-invoicing...



Sales 21%

Routine customer

service 23% Educating clients

21%

Helping clients

grow their programs

20%

Program reviews

16%

CCRM Time Allocation (n=45)

(1) On average, CCRMs take 22 business trips each year to visit clients and two to attend external education events. Source: “Commercial Card Professionals Roles, Staffing and Compensation, Results of the NAPCP 2014 Salary Survey,” National Association of Purchasing Card Professionals, October 2013. Note: This survey has historically been conducted every three years as prior survey years include 2010, 2007, 2004, and 2001.

Top-6 qualifications for a bank hiring a CCRM:

• Customer service skills / experience (100%)

• Commercial card knowledge / experience (98%)

• Prior CCRM knowledge (98%)

• Willingness to travel (96%) (1)

• Bachelor’s degree (96%)

• Technical / computer skills (96%)

89% of CCRMs are eligible for bonuses based on:

• Growth of clients’ programs.

• Sales to clients.

• Client retention.

(Bonus as a percent of base varies from 5% to 50% with a 23% average level.)

Among various roles, CCRMs are expected to be the first and central point of contact for clients’ commercial card program administrators.

Your Provider’s Role

Your providers’ commercial card relationship managers (“CCRMs”) fulfill many roles.


In summary...

Key Conclusions Defining the Value of Commercial Cards

• Cards are a lynchpin in business process automation:

Corporate travel (compliance, expensing, duty of care)

Low-dollar spend (invoice elimination, use monitoring)

High-dollar spend (bridging disparate A/R & A/P systems)

• Should commercial card solutions be selected based on:

How well a solution automates business processes; or,

Signing bonus and rebates basis points quotation; or,

Both (better automation will drive more spend)?


Contact Information & Biography

Thank You

Frank Martien | Partner

Three Park Place, Suite 200

Annapolis, MD 21401

410-855-8513

[email protected]

www.firstannapolis.com

Frank joined First Annapolis in 1996 and leads the firm’s commercial payments practice area where he focuses on corporate cards, purchasing cards, one cards, virtual accounts, small business cards, private label commercial accounts, and fleet cards. His engagement experience includes a wide spectrum of strategy, primary and secondary market research, financial analysis, RFP / vendor selection, and buy and sell-side M&A assignments. Frank’s clients include banks, payment networks, and multinational organizations. Through client assignments, speeches at major industry events and client conferences, webinars, articles and quotes in payments-related publications, and as an Advisory Board Member of Commercial Payments International, Frank is a recognized industry expert. Frank’s financial services work experience includes positions at 5Star Bank (Alexandria), Capital One (Richmond), Citibank (former Towson cards office), and Alex. Brown & Sons Incorporated (downtown Baltimore). Frank received his M.B.A. in Charlottesville, Virginia from the Darden School at the University of Virginia (Faculty Award for Academic Excellence for class ranking in top 10%). He received his undergraduate degree in Lexington, Virginia from Washington & Lee University (Phi Beta Kappa, Magna Cum Laude).

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