Communicating The Value of Commercial Cards RESTRICTED

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1 Communicating The Value of Commercial Cards

2 What is the Commercial Payment Card Value Proposition? There is no debate that getting payment data directly to where it is needed creates cost savings and value added management information for buyers and suppliers alike. However the value proposition of different payment types is not well understood by end users, resulting in lost opportunities. This session explores the components of value and what the industry can do to communicate it to the market. 2

3 The Cards Value Proposition Verbatim from a recent discussion with a cash management professional: You don t charge the client fees? You give them easy-access to quality data? You provide data-file integration into downstream systems? There is an interest-free funding period? Why isn t every client using cards? A banker, January

4 The Real Value of Commercial Cards Calculating the true value in card payments 4

5 Santia Video 5

6 Introduction to the Santia HSBC Corporate Credit Card Solution Our Journey Jacqueline Hitchen FCICM (Grad) March 2015 Santia Consulting Ltd 2013

7 Where did our journey begin? Paper based expenses process that was difficult to administer and manage with no visibility Our people funded their own expenses Multiple process administered by various departments within the business Funding expenses in this way impacted on our cash flow Overall expenses processes did not give us value for money Santia Consulting Ltd 2013

8 What was our destination? A simpler and more effective way for us to manage and administer our business expenses Eliminate the need for users to fund their own business expenses Bring all our expense processes together Improve our cash flow Reduce our costs Santia Consulting Ltd 2013

9 Did we reach our destination? Indeed we have our robust expenses solution ticks all the boxes We now have the means to manage and administer the transactional process of expenses in a cost effective way with full visibility Our people no longer fund their own expenses all purchases for company business are made using their Santia HSBC Corporate Credit Card All processes for expenses are now channelled through MiVision, where those processes are now the responsibility of one department Our Corporate Card gives us credit terms Implementing this solution has allowed us to reduce our processing costs and increase our working capital through improved credit terms Full support and buy in from stakeholders at all levels of the business All our people now require is their Santia HSBC Corporate Credit Card and access to the MiVision online portal Santia Consulting Ltd 2013

10 Appendix 10

11 Spend Policy Compliance & Float Benefit Spend Policy / Compliance With Corporate Card Integration Without Corporate Card Integration Result / Saving Better access to data regarding business travel Visibility into business-wide aggregated T&E expense Compliance to Corporate Travel Policy 79% 12% Monitor and maintain T&E budgets 79% 21% Negotiate better rates/discounts from preferred providers 84% 52% Reduction in non-compliant behaviour According to MasterCard Advisors, Global Insights Report 2012, organisations that use travel card data in negotiations report greater discounts compared to organisations that do not use travel card data in negotiations. Examples of improved discounts as a result of card data usage include: air fares (9.1% versus 5.9%), hotels (12.3% versus 9.5%) and car rental (14.5% versus 12.4%) Float Benefit Typical settlement Card-based payment Card Billing Cycle + Days to Pay 1-30 days for billing cycle (avg. 15 days) + 25 days to pay On average a card-based settlement adds ~40 days of additional cash float Cash / Time *Source: Aberdeen Group, Corporate and Expense Study

12 Cost Saving The most significant cost on the procuring goods or paying a supplier is not typically payment itself, but the manual effort involved in the end to end process of choosing the right supplier, the purchasing process, such as raising PO s or a pre-travel approval, the matching and settlement of an invoice and the reconciliation and allocation of costs to the appropriate GL s and cost centres. Cost to process an expense report Reduced errors in expense processing With Corporate Card Integration Without Corporate Card Integration % 12%? ~ Net saving per expense claim processed Source: Aberdeen Group, Corporate and Expense Study 2014 Settlement Process Cost per transaction Days to process Traditional paper-based PO Purchasing card Savings *Source: RPMG Purchasing Card study 2014 ~ Transaction Fees per payment type Cost?* International Wire Faster Payment 5.00 Domestic Wire 2.00 BACS 0.20 Estimated blended saving per card transaction 1.50 Estimated typical UK payments market costs, will vary by client 12