A recent member-submitted poll question within the Peeriosity Corporate Card research area served as a catalyst for an excellent discussion in regards to providing corporate travelers with a credit card that can work in all locations outside the US.
Over 75% of the poll respondents, representing travel-card managers from leading global companies indicated that US-based travelers using their company-issued travel credit card had experienced difficulties in making payments at some combination of hotels, restaurants, or railway stations – essentials for business travel – while outside the US.
The issue stems from the overwhelming majority of US cards relying on magnetic-strip technology rather than embedded microprocessor chips (“chip & PIN”), which have become the global standard. With chip & PIN, users no longer sign but instead key a PIN to authorize the purchase. Magnetic-strip cards are quickly becoming obsolete outside of the US primarily due to ease of fraud compared to the newer technology.
While major hotels have no issue with handling magnetic-strip cards, mass transportation, and restaurants can be more challenging. Most forms of transportation require chip technology either through kiosks or portable card readers. In major cities outside North America, restaurants have the means to accept the old technology but in many cases, the staff is not familiar with or trained in how to process the magnetic-strip card transaction. In smaller cities, the only options are chip & PIN cards or cash. Fortunately, magnetic-strip cards are still readable by ATMs globally and many travelers are relying on using cash withdrawals when incurring problems. In our poll question, 57% indicated that US-based travelers were using cash for a significant amount of international travel expenses that would normally be on a card, not the ideal situation.
The poll question and ensuing discussion indicated a few different ways organizations and the managers of travel card programs are addressing the issue. A few representative comments include:
- “Our bank has indicated they can issue us chip & PIN cards, but they are expensive, so it’s not anything we will do on a wide-scale distribution. Heavy international travelers will be issued the cards.”
- “We have asked employees to be prepared to use cash and are informing them of the situation. We are pushing back on vendors that our employees frequent often and asking them to accept the old technology. In many cases, when magnetic-strip can be accepted but the staff is unfamiliar with how to process the transaction.”
- “We currently have a global card program but are considering moving to a regional program for Asia where we find magnetic card acceptance to be more difficult to workaround. Working regionally, we believe we may be able to issue cards for both local employees and international travelers to use when in the region that will be more convenient through greater acceptance.”
The discussion talked about specific experiences with provider banks, some experiences better than others, and which banks have promised what and by when.
Travelcard administrators have some challenges in regard to international travel as a result of changing technology. Their customers, the travelers, just want an easy-to-use experience that won’t complicate their business travel. In the Peeriosity Corporate Card research area, almost 500 peers collaborate on common issues by sharing challenges, experiences, and solutions.
What issues are you facing in managing your corporate card programs?
Who are your peers and how are you collaborating with them?