Is greater efficiency on the cards?


Scott Abrahams is MasterCard’s Group Head of Acceptance for UK & Ireland.

Scott Abrahams

Spending on cards now accounts for a third of the UK’s total gross domestic product (GDP)1, but more businesses should be making the most of the move away from cash, argues MasterCard’s Scott Abrahams.

When it comes to cards it’s fair to say that the business world is currently lagging behind the consumer arena, which leads the way on usage and solutions such as contactless payments, electronic wallets and pre-paid cards. Smaller firms in particular still tend to value cash highly – but they are increasingly seeing the strain and inefficiency of over-reliance on paper, and becoming ever more receptive to alternatives.

What these businesses are seeing is the financial and operational efficiency made possible by card solutions. These include:

  1. more predictable, measurable and reliable cashflow
  2. greater convenience for buyer and seller
  3. improved visibility and control – enhancing ability to monitor spend and potentially negotiate better deals with suppliers.

Visibility and control

Many of the perceived barriers that restrict card use in the business arena can be attributed to a lack of understanding or awareness of these potential efficiencies. For example, some businesses are wary of giving employees a credit line, fearing loss of control and accountability. In fact, by delivering enhanced reporting and visibility, cards present a solution rather than a risk.

Consider travel expenditure. With a corporate card you can set pre-authorised limits, approved supplier lists and authorisation channels. Compare that to reviewing receipts for transactions that have already been made – in expenditure terms, the ship has already sailed.

Efficiency is built in to the solution. Running accounts payable can be a significant overhead, with multiple suppliers and piles of invoices to be reconciled. Card solutions can streamline the whole process and generate accessible management information (MI) you can use to your strategic benefit.

‘War on cash’

At MasterCard, winning a war on cash is our main strategic goal. Everything we do is around improving electronic payments and creating a value proposition that is always at least as good as cash, and in many circumstances significantly better.

Our focus is on education and demonstrating the benefits of cards as a payment method that offers security and efficiency. We monitor trends, identify valid concerns and, as an industry, deliver processes and products in response.

Global uptake

We know there is a receptive market. On a global level, there has been significant progress in terms of card usage and uptake in diverse regions. The biggest contactless market in Europe is in Poland, for example. In Nigeria, we’re running a trial of pre-paid cards on the back of every national identity card – across 17 million people, and we’ve just opened a new development laboratory in East Africa. It’s just one region where we see strong appetite for new solutions.

Activity in the UK is also helping to drive global card trends. Transport for London’s uptake of contactless payments, for instance, puts Britain at the forefront of this technology.

It’s not driven solely by industry – the UK Government is exploring ways to use pre-paid cards for benefits claimants; such cards could arguably increase financial inclusion and encourage responsible money management.

Continuing evolution of technology

As the technology evolves, so do the possible applications of card and cashless solutions – and there’s no sign of the current pace slowing.

“The line between on and offline is increasingly blurred.”

Retail continues to be a rich source of innovation. The line between on and offline is increasingly blurred, driving the development of cashless solutions that bridge these worlds – biometric identification, for example, is generating real excitement.

That’s why we’re piloting a card with a finger vein identification sensor in Norway, and in Africa, a card that identifies you by your heartbeat. We’ve also worked with BMW to deliver a card to hire, unlock and operate a vehicle. For us, making sure we stay one step ahead of technology trends supports the rise of cards as the preferred payment method.

Practical support for businesses

There’s a real opportunity to engage more small and mid-sized businesses in the war against cash. These are companies well known for demonstrating innovation and flexibility and it’s essential that the card industry matches their ambition and delivers solutions that really work for them.

“There’s a real opportunity to engage more small and mid-sized businesses in the war against cash.”

Biometrics and other advanced technologies will play a vital role, but there are other ways to innovate too. The bottom line is that we have to recognise cards as more than just a piece of plastic. As an industry, we know that chip can already do an awful lot more than make simple payments. Today's card solutions offer huge opportunities for business efficiency - tomorrow's will offer even more.



  1. Source: The UK Cards Association

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