When I sit down and look at figures, the one thing which
always amazes me is the way in which card payments have grown. A few years ago
we introduced the option to pay in-car by card in all vehicles. Previous to
this we had just one card machine which was a large (shoe size) device complete
with a till roll for printing long receipts.
While the card machine was useful and offered flexibility it
had some issues. Firstly, the battery did not last very long and always
required charging for considerable time. Secondly it was expensive! Not only
was a deposit required before receiving the machine but there was a monthly
rental fee of over £30 and the fee on every transaction was an additional six
percent.
The machine did help bring in new customers, especially if
they wished to pay by Amex but it was clunky and slow. Added to this was the
logistics of swapping the machine between cars and drivers which was
challenging to say the least. With the advances in mobile phones and Bluetooth technology,
time came to ditch the machine and instead use an app with a card reader.
The advantage of using a mobile phone meant a better data connection
using the digital 3G network. Added to this was the removal of a monthly rental
fee, no setup cost and finally the drastic reduction of transaction charges. They
tumbled from six percent to 2.75% and now it is less than that. Tracking the sales
figures is very revealing as the uptake is huge.
In the five years that I used the big old clunky machine,
sales were at best £5k a year. As soon as apps were introduced the sales increased
to ten times this amount in the next five years. The reason is what is known as
‘The Rise of the Corporate Citizen’ - which basically means travellers taking
control of their own travel budgets.
Imagine having a large global company where hundreds (or
even thousands) of people travel on business. In the old days a department (with
staffing costs) would control the budget. They would be responsible for
purchasing airline tickets, train tickets, hotel accommodation and ground
transportation. These were all swallowed up in one big account which was then difficult
to decipher.
Now compare this to all the people who travel having their
own credit card. It becomes a lot easier to get a breakdown of costs and
quickly identify an individual who is spending more than anyone else. It also provides
a history specific to the individual so that trends can be tracked and
interrogated for their data.
An additional bonus in all of this is the simplification of administration
within an organization and the reduction of work for their accounts departments.
Before the corporate citizen, we would have sent an invoice to a local site who
had booked the travel for another site (usually overseas). The overseas site
would then have been invoiced by the local site to recover the costs.
Although we charge the same amount for a journey on account
as we do for card, the layers of administration which are removed by using card
payments often means a company could pay more but still make a saving. There is
also the transferring of payments across borders and exchange rates to consider
and the time required to process all this.
For me, one of this biggest advantages to using card
payments is the speed in which drivers receive payments. Today some payments
are almost instant and at most a couple of days. In comparison to that big old
clunky machine I had years ago, that is fast! I still remember having to wait
up to three weeks and then work out what the lump sum related to.
For passengers, the biggest advantage is speed and
convenience. Just yesterday afternoon I did a local transfer for less than £30.
That meant the passenger could pay using contactless technology just like he
did with a colleague in the morning. The only difference was when he asked for a
receipt, I smiled and simply said ‘already sent’ - the app recorded his email
address from the earlier trip. Simples.
