International travel adds additional complexity to business management including new languages, currencies, and of course culture. Unfortunately, expenses also become trickier to manage when employees cross international borders. In the past, business travelers would arrive home with suitcases stuffed with paper receipts in foreign languages and currencies. Procrastinating on filing those expense reports became commonplace, and once time had passed, it’s easier to forget the purpose of each expense.
Global business travel spending will kick back into higher gear in 2022 on the back of the global recovery–boosting industry spending to over $1 trillion. Those that need to manage spend across several global offices will see increased complexity around reporting and with the rise of remote work, businesses will now hire from a more global talent pool. Hiring internationally also means spending internationally, which presents spend management challenges ranging from security to reporting. As spending increases, companies will benefit from streamlining the traveler experience and managing costs.
Smart corporate cards paired with an automated expense management solution are easy to deploy for business travelers and global businesses. Today we’ll take a look at why smart cards are uniquely suited for global spend and the 3 key reasons to adopt them today.
What Is a Smart Corporate Card?
A smart card helps companies efficiently manage spend by offering a safe and secure payment solution combined with intelligent software. Employees use physical and virtual smart cards to automate and centralize the spending and approval process, giving finance teams greater control and visibility.
When used with the right software platform, smart cards are a real-time solution to efficient cross-border spending. Finance leaders set spend controls to preempt overspending before it happens and reduce the time and money to provide reimbursements.
Thanks to built-in policy and reporting, smart cards also help companies eliminate expense reporting while boosting policy compliance and spend visibility. This eases the administrative burden of global operations and travel and provides additional benefits:
1. Contactless Payment and Multi-currency Support
Exchanging cash or payment cards in a foreign place without knowing sanitation protocols can be disconcerting during a pandemic. As a method of enhancing safety, the use of tap-to-pay contactless cards accelerated in 2021. An embedded smart chip stores and processes information to enable secure and convenient payment.
Even a single business trip might mean visiting multiple countries using different currencies. Smart cards with multi-currency support not only eliminate the need for converting cash into different currencies but also remove administrative headaches if tied into spend management systems. Accurate reporting based on floating exchange rates doesn’t require manual involvement. Automated electronic recordkeeping actually reduces the chance of error.
2. Enhanced Security
In 2020 alone, there were 1.4 million cases of credit card fraud. In Europe, card-not-present, or illicit activity over remote channels accounted for 80% of the value of the fraud. Remote fraud involving cross-border transactions is more difficult to track, and companies are keen on tightening security for all payment channels, especially facilities available to business travelers.
Virtual cards have gained popularity for addressing corporate demand for flexibility and security. Companies issue burner cards for one-off payments, recurring payments, or a card valid long enough to cover all expenses incurred during a business trip.
Smart virtual cards have a different number from the corporate account so, even if employees fall victim to fraud, the business limits its losses. Fraudsters are also less likely to succeed in charging unauthorized purchases against a virtual card linked to an expense management tool. Losses sustained due to fraud are lower because software checks transaction legitimacy at the point of purchase.
Traveling to a foreign place also opens up the risk of theft or loss of belongings. Since companies issue virtual cards in minutes, replacing a compromised card is fast and convenient.
3. Faster Reconciliation
Reconciliation starts with recording all relevant transactions and then checking cash flows and policy compliance. Operating in a foreign market or factoring in business travel makes manual reconciliation quite tedious. If finance teams have to wait for expense reports to record and reconcile charges, the workload piles up.
Smart cards put an end to expense reports by automatically adding electronic records at the point of purchase. Intelligent spend management software approves and reconciles transactions without human intervention, only flagging exceptions if necessary. As a result, international employees and travelers avoid unnecessary paperwork or worrying about missing or damaged receipts. At the same time, finance teams do not have to chase employees about submitting expense reports to meet report deadlines. Preset policies reduce reporting hours up to 66% and reconciliation time up to 95%.
Navan Expense, launched in Europe in late 2021, provides the first fintech-powered corporate card with truly global reach and multi-currency support. It solves all of the pain points above for small businesses to large enterprise.
Learn more today about this end-to-end travel and expense solution that modernizes spend management for global enterprises.