CPI Global Summit Highlights “3G” Themes: Growth, Globalization and Governance

by Patricia McGinnis 0

Commercial Payments International (CPI) heldtheir annual Global Summit of commercial card and commercialpayment providers in New York City last week. It continues to be arelatively high-level event, with speakers that focus on thestrategic issues affecting the payments needs of businesses, andplenty of opportunity for follow-up in smaller conversations.

Growth: Payments via commercial cards continue tobe one of the fastest growing segments in banking, and theconference reflects the combination of enthusiasm, optimism, andinvestment that are associated with growing, profitable businesses.Industry participants are setting volume records every year, andstill see ample opportunity to expand. In some cases, theopportunity to move from paper to electronic payments is a majormotivator for customers, while others are seeking thestill-emerging benefits of straight-through processing and workingcapital optimization. Spending on travel is the more mature market,growing more slowly than purchasing spend. The latter, however, isenergized by the diversity of efforts classified as e-payables, oraccounts payable settled via accounts on the card networks.

Globalization: Prior years have seen only passingmentions of the needs of multinationals and the emergence of cardsin new markets such as Asia. This year, however, a kickoff keynoteby Ian Bremmer of the political risk management firm Eurasia Groupbrought geo-political risks and global payment needs front andcenter. What are the aspirations or expectations of the leadingWestern card networks in the rest of the world? What is the futurerole of China Union Pay, both inside and outside of China? How cancard networks facilitate world trade? Given that the trade paymentalternative today is usually a slow, expensive wire transfer, whatare the prospects for cross-border card payments? Arecard-network-enabled payments even more competitive economically incross-border payment markets rather than in domestic or singlecurrency markets? What will be the role of Bank Payment Obligations(BPOs) as envisioned by SWIFT? How can currency be incorporated incard network transactions in ways that benefit commercialcustomers? There were more questions than answers, but allhighlighted the potential for future growth globally.

Governance: Several speakers highlighted the riskof regulatory change. Some conversations focused on the market inthe United States and the changes still pending there, especiallywith respect to commercial use of prepaid cards. Others highlightedthe continuing discussions about the legality and enforceability ofinterchange, in which the U.S, Canadian, and European Unionregulators may be taking different views. For some, the question ofindividual liability versus corporate liability for travel cardscombined the restrictions of regulatory issues with the complexityof global implementations. In all cases, the speakers agreed: thecommercial card industry is not well understood by regulators inany of the relevant political arenas. Attendees and industryparticipants were urged to think through their regulatoryexposures, and begin taking the necessary actions to educateregulators about a somewhat arcane, deceptively complex, andrapidly evolving segment of the card industry.

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