It’s about the customer journey, not just the payment transaction


As payments become a utility, commercial card issuers need to focus on the entire value chain.

by Nicki Bull Bisgaard

Created: January 18th 2021

Commercial card providers are often too focused on just the card and the payment transaction. But as someone once said, no-one wakes up in the morning excited about the prospect of making a payment. The truth is, your customers do not care about how a payment is made or the infrastructure behind it – for them it is simply a means to an end. Payments have become a utility, and for progressive commercial card issuers that wish to truly engage with their customers, the focus has shifted to the wider value chain and the customer journey.

In my view, this focus on the payment transaction itself has been partly the result of an over-dependence on interchange in our industry as the primary revenue source. Interchange has propped up our business models and sustained commercial card issuers who are typically much less reliant on interest income from revolving balances than our consumer card cousins. As a result, commercial card issuers often do not look much further than the transaction itself, and in so doing they are finding it challenging to transition from product centric to customer centric.

Nicki Bull Bisgaard, Group Head, PayTech Group & CEO, EedenBull

However, change is coming if it hasn’t arrived already. Open banking, Big Tech, real time payments are all driving towards the convergence of cards and payments which in turn will blur the lines between payment types. The form factor of cards becomes much less relevant and the cost of payments will be overshadowed by the value of payments going forward. Therefore, the true value of commercial payments can only be realised by focusing on customers and their specific needs.

Issuers should concentrate less on their infrastructure because there is little value add here. More investment needs to centre on the platforms which engage with customers, and support them in their own journey. Banks that fail to adapt to these changes will simply become part of the plumbing infrastructure, which, in turn, puts the customer relationship at risk of disintermediation.

So what do customers want and what is the journey? Customers today are looking for an on-demand and consumerised experience, even in a B2B environment. Financial institutions need to rethink their solutions from the customers’ perspective and be a part of that value chain rather than provide conventional offerings through a product-centric lens.

To make the customer journey smooth, banks can start by implementing innovations across multiple touch points; improving interactions at any given customer touchpoint does not in itself create the customer journey. However you have to start somewhere, and there’s no better place than with the friction and pain that is typically in the onboarding of a new customer. You should aim to minimise the pain points by converting this multi-day, multi-step process into an automated self-service. That gets you to first base, but improving the customer journey also means looking deeper and across the value chain as your (now onboarded) customers see it.

The value chain for commercial card users is somewhat complicated by the interconnected but distinct roles of cardholder and programme administrators.

For cardholders it is not just about the convenience of usage of the payment form factor (physical card, payment token or digital wallet), but also the ease of processing the expense out of their inbox and into the company’s accounting system. And the emerging convergence between virtual cards and mobile payment apps may allow cardholders to complete their customer journey from pre-purchase, purchase and post purchase all in a single application.

For programme administrators the value chain is more about facilitating the usage of the company’s assets (in this case their card programme) and managing it through automated self service tools. Ultimately the goal here will be to enable a decentralised spend management programme within a controlled environment.

Commercial card issuers that can truly move from product centric to customer centric will be rewarded. In 2020 Boston Consulting Group reported that successful customer journey programmes can deliver a 15-25% cost reduction; a 10-20% revenue uplift and a 20-40% improvement in customer advocacy. However the path to change is often not easy and needs bank-wide changes to adapt their culture, processes, operating model and ways of working, not simply something that a commercial card business unit can do in isolation.

One other way that commercial card issuers can facilitate the change may be by striking partnerships. Partnering with fintechs is a rapidly growing and mutually beneficial scenario. Banks can utilise partners to mitigate the challenges within their own organisations, and develop platforms that keeps banks fully connected to their customers across the value chain. Banks that still don’t read the signals run the risk of being relegated to the lower end of the value chain.

Nicki Bull Bisgaard is Group Head of PayTech Group and CEO of EedenBull