Industry Benchmarking Trends - Citi. · PDF fileSource: RPMG 2013 Travel Card Benchmark Survey...

©2015 MasterCard. Proprietary and Confidential

Industry Benchmarking Trends Metrics and Methods to Drive Program Growth



• Provide market level research and insights on

purchasing and travel card program trends

• Highlight role of virtual cards in Electronic Accounts

Payable (EAP) programs as key driver of growth

• Introduce key benchmarks for purchasing and

travel card programs

Presentation objectives

May 18, 2015

Page 2

©2015 MasterCard. Proprietary and Confidential Page 3

Check use for B2B payments is declining

rapidly in the US

• The drivers of electronic payments are:

– Cost savings

– Improved cash forecasting

– Fraud risk reduction

• The top barriers to the adoption of

electronic payments

– Convincing trade partners to

make/receive electronic payments

– Shortage of IT resources

– Lack of a standard format

– Lack of integration

Check use for business payments continues to decline in favor of electronic methods

* Source: 2013 Association of Financial (AFP) Professional Electronic Payments Survey May 18, 2015


• B2B – Total

Purchasing Card

market expected to

grow 9% CAGR over

next 5 years, versus

11% CAGR for past 5

years.

• T&E – Corporate card

market expected to

grow 3% CAGR over

next 5 years, or at

same rate as past 5

years.

B2B and T&E card program growth

May 18, 2015

Page 4

$120 $131

$143 $157 $152

$138 $156

$164 $168 $173 $178 $184 $191 $198

Purchasing Card (B2B) Spending

Travel Card (T&E) Spending

3% 3%

11%

9%

Source: RPMG 2014 Purchasing Card Benchmark Survey Results


May 18, 2015

B2B Payments

Page 5

©2015 MasterCard. Proprietary and Confidential Page 6

Within B2B, growth driven by Electronic Accounts Payable (EAP) usage

8%

17%

25%

35%

45%

9%

20%

30%

42%

54%

11%

24%

37%

53%

69%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2014 2015 2016 2017 2018

Traditional Pcard

All Pcard Platforms

Electronic Accounts Payable

Spending in EAP accounts is expected grow by 69% by 2018 vs. 45% on traditional Purchasing card (plastic, cardless & ghost accounts)

May 18, 2015 Source: RPMG 2014 Purchasing Card Benchmark Survey Results


May 18, 2015

EAP driving growth in larger value transactions…

Page 7

15% 19% 28% 31% 32%

71% 65% 54% 48% 47%

9% 10% 12% 15% 15%

5% 6% 6% 6% 6%

0%

20%

40%

60%

80%

100%

120%

2005 2007 2009 2011 2013

Wire & other

ACH

Checks

Pcard

Transaction size $2,500 - $10,000



May 18, 2015

… and new categories of spend

Page 8 Source: RPMG 2014 Purchasing Card Benchmark Survey Results


Program optimization continues to be a key trend for B2B expansion

1. Virtual accounts are moving from traditional use-cases to other

vertical opportunities

2. Increasing Supplier Acceptance of EAP payment is one of the

primary goals for companies looking to optimize their spend

3. Integration with players in the B2B payments ecosystem is

increasingly important to effectively tap into B2B payment flows

4. Optimization – B2B can be complex and more and more corporates

are seeking assistance to optimize their B2B payment programs

May 18, 2015

Page 9


May 18, 2015

Program optimization steps – what actions Best Practice organizations take that matter most

Page 10

Key Purchasing Card benchmarks for

B2B programs:

1. Organizational metrics

2. Transaction capture and

cardholder spending activity

3. Percent of organizations using

Purchasing Card to pay for goods

and services



May 18, 2015

B2B Benchmarks

Page 11


May 18, 2015

1. Organization metrics

Page 12

B2B benchmarks



May 18, 2015

2. Transaction capture and cardholder spending activity

Page 13

B2B benchmarks



May 18, 2015

3. Percent of organization using Purchasing Card to pay for goods and services

Page 14

Goods Services

B2B benchmarks



May 18, 2015

Travel Card

Page 15


For travel card, best practice programs capture 37% more spend

81%

53%

7%

13%

4%

1%

5%

16%

3%

17%

Best Practice Needs Improvement

Company check, ACH, or cash advance

Employee pays with personal cash, check,or credit card

Prepaid travel cards, meeting cards, orother non-travel charge cards

Ghost and EAP accounts

Plastic corporate travel card account heldby employee

92% Captured on Card Products

67% Captured on Card Products

By moving “Needs Improvement” companies into “Best Practice” performers, a $40M T&E program could capture an additional $3.7M more on card on just air, lodging, and auto rental alone.*

May 18, 2015

Page 16

37% higher

Source: RPMG 2013 Travel Card Benchmark Survey Results, MasterCard Analysis


May 18, 2015

Businesses should evaluate performance against Best Practice metrics for Travel Card programs

Page 17

Key Travel Card benchmarks for T&E programs:


2. Expense report processing metrics

3. Travel spend by payment method

4. Percentage of spend captured by category

5. Travel booking practices and integration levels


May 18, 2015

Travel Card Benchmarks

Page 18


May 18, 2015


Page 19

T&E benchmarks

Organization Statistics and Travel Card Program Performance Measures by "Best Practice" and "Needs Improvement"

Best Practice

Needs

Improvement

Percent

Difference

Organization Statistics

Number of employees 13,275 13,438 -1%

Annual sales revenue 5,782,543,281$ 5,900,129,467$ -2%

Annual travel budget 26,510,471$ 26,307,018$ 1%

Travel budget as % of sales revenue* 0.75% 0.76% -1%

Age of travel card program 9.84 9.05 9%

Program Performance Measures

Number of travel cards 3,030 1,465 107%

Percent of employees that travel on business more than

twice per year 25.7% 21.1% 22%

Card-to-employee ratio 22.8% 10.9% 109%

Average monthly travel card spending $3,569,629 $1,259,793 183%

Median monthly travel card spending $2,776,389 $767,500 262%

Monthly travel card transactions 17,798 6,958 156%

Monthly travel card spending per employee $269 $94 186%

Percent of travel spending captured on travel crds

(including plastic, ghost, and EAP) 92% 67% 37%

Annual travel card spending as a percent of sales

revenue* 1.39% 0.43% 223%* This is the "average" of the company ratios, and may be different when responses are summed to create a

group statistic

Source: RPMG 2013 Travel Card Benchmark Survey Results


May 18, 2015

2. Expense report processing metrics

Page 20

Key Expense Report Processing Metrics by the Type of Expense Reporting Method in Use

Cycle Time (in

Days)

First Pass

Quality

Time (in

Minutes) to

Process

Expense

Report*

"End-to-End"

Process Cost

of Expense

Report

Expense Reporting Method

Paper-based expense report

processing 9.7 76% 72 $40.05

Electronic, pre-populated with travel

card data 8.9 81% 40 $22.88

Electronic, not pre-populated with

travel card data 8.9 82% 57 $32.29

Travel card statement used in place of

expense report 9.3 86% 51 $28.51

* Processing time includes (a) employee completion of an expense report (including identification an input of travel expense data and

attachment of appropriate receipts), (b) the combined time of all supervisory review(s) of expense report submitted, (c) clerical

processes to prepare an expense report for payment (including data input, verifying calculations, review/input of accounting codes,

and evaluation/reconciliation of invoices to expense report), and (d) clerical/accounting processes to reimburse employee and

reconcile payment to bank data.

Type of Expense Report Processing Method

Best PracticeNeeds

Improvement

Expense Reporting Method

Expense reports are completed

manually and submitted in paper format

10% 19%

Expense reports are electronic but not

pre-populated with travel card spending

data

8% 23%

Expense reports are electronic and pre-

populated with travel card spending

data

78% 54%

Traveler uses travel card spending

statements as the expense report1% 4%

Other 3% 0%

RPMG 2013 Travel Card Benchmark Survey, Exhibit 75

T&E benchmarks



May 18, 2015

3. Travel spend by payment method

Page 21

T&E benchmarks



May 18, 2015

4. Percentage of spend captured by category

Page 22

Pecentage of Spend by Category

Best PracticeNeeds

Improvement

Percentage of Total Spending withing Category

Paid with Travel Cards

Airfare 89% 77%

Lodging 85% 68%

Auto Rentals 85% 62%

% Using Travel Card Data to Obtain Discont On:

Airfare 74% 68%

Lodging 86% 80%


% of Organizations Reporting Travel Card Data as

"Important" or "Very Important" to the Discount

Obtained on:

Airfare 72% 40%

Lodging 68% 45%



T&E benchmarks



May 18, 2015

5. Travel booking practices and integration levels

Page 23

Travel Booking Practices and Level of Integration

Best PracticeNeeds

Improvement

Travel Booking Policies

Travel is booked through a specific

travel agent or with a travel agency

online booking tool

89% 84%

Travel is booked through a specific

consumer online booking tool1% 8%

Travel is booked directly with a

particular service provider3% 1%

Employees book their own travel

arrangements as they see fit7% 7%

Level of Integration between Booking

Software and Expense Reporting System

No integration 46% 59%

Low integration 8% 14%

Moderate integration 13% 5%

High integration 33% 22%


T&E benchmarks


THANK YOU

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Industry Benchmarking Trends - Citi. · PDF fileSource: RPMG 2013 Travel Card Benchmark Survey...

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