Under Amex’s Shadow, Travel Management Companies Tighten Payment Ties
BCD Travel on Thursday announced it would become UATP’s first travel management company issuer of lodge card accounts. An official from CWT said the TMC expected soon to make announcements about payment partnerships for next year. TripActions is said to be working on a card. There’s also the TravelBank-Brex partnership, not to mention the new Expensify card.
Corporate travel payment is hot enough to melt plastic, but why now? And why hadn’t TMCs previously competed with the original two-headed combatant, American Express?
First, the opportunities. No surprise here, there’s money in payment. Merchants pay a couple percentage points on sales through card networks, varying by the network. Card issuers may share that with marketing partners (or pay them a referral fee). Like any company,
TMCs should be on the lookout for new revenue streams.
“As an issuer of the UATP account, BCD Travel will share in the economic value just like any other issuer of payment schemes such as Visa, Mastercard and American Express,” according to a written statement by BCD Travel VP for commercial payment solutions Mario Kriebel. “The fees are proportionate to the value provided by an issuer for taking on things such as credit risks, customer acquisition, customer service, marketing and management of customer transactions.”
There’s customer benefit in payment. TMCs for decades helped clients by marrying card data with itinerary data and cleaning it up for better accounting, negotiating and policy-making. Various third-party companies help perform the service. The tighter the tie-up between the travel company and the payment company, the cleaner the marriage. This also should mean more efficient expense management.
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