Hong Kong – A new study commissioned by Citi and undertaken by The Economist Intelligence Unit (EIU) on the digitization of corporate travel finds considerable innovation in payment practices in the region with digital payment methods including e-wallets and virtual cards coming into wider use.
The study polled 210 travel managers, senior executives and c-level executives across the region between July and August 2019. Respondents polled were roughly equally split between Australia, China, India and the ASEAN region.
A total of 20 industries are represented in the study, with the largest number of respondents from technology, manufacturing and financial services. Large firms, earning US$500 million or more, account for 62% of the sample.
The findings were released at Citi's 10th Asia Pacific Commercial Payments Summit which commenced in Singapore this morning. Themed 'Where Data Drives Business', the annual summit brings together over 130 corporates and financial leaders from over 80 organizations.
Titled Disruption Hub: Landing innovation in Asia's corporate travel industry, the study covers how the digitization of corporate travel has been a major driver of efficiency for corporates and the use of diverse travel payments in the region. Increased data inflows and enhanced analytical capabilities are having a transformative effect on companies' ability to manage employee travel. For companies, analytics tools are predominantly descriptive, giving them a comprehensive view. On the other hand, predictive tools can also greatly simplify personal travel management for employees.
Over 60% of respondents polled indicate that employee corporate credit cards remain one of the primary methods used to pay for business expenses while travelling. Personal credit cards followed at 39.5% and cash at 31.9%. Close to one-third, or 29.5%, indicate the use of e-wallets to pay for such expenses and 7.6% cite the use of virtual cards for the same purpose, illustrating the wider acceptance of alternative payment methods.
The use of employee corporate credit cards takes precedence in markets including Australia (78.8%), India (70%) and ASEAN (66.7). In contrast, in China, where digital payments dominate, 62.7% indicate the use of e-wallets as one of the main methods of payment for travel-related business expenses. In ASEAN, cash was also cited as a main means of payment, with close to half or 47.4% of respondents selecting the option—the highest amongst the other markets polled.
Tarun Minglani, Asia Pacific Commercial Cards Head, Treasury and Trade Solutions, Citi, said: "Travel technology in Asia Pacific is evolving. We expect greater acceptance of newer technologies and digital payments in the coming years. In addition to payments, a capability that travel managers expect firms to be benefiting from is predictive analytics, incorporating artificial intelligence (AI) and machine learning capabilities to gain insights from data, heighten efficiencies, and make informed decisions around travel and expense management policies for tightened compliance and cost control."
Charles Ross, Editorial Director, The Economist Intelligence Unit, said, "As in most other realms of business activity, mastery of data and its analysis is proving a powerful weapon for Asia Pacific corporate travel managers. It is helping them to stay on top of an increasingly complex business travel environment, but leveraging the ever growing volumes of data and generating valuable insights will require more expertise and better tools than are currently available."
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Citi Treasury and Trade Solutions (TTS) enables our clients' success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions and public sector organizations across the globe. Based on the foundation of the industry's largest proprietary network with banking licenses in over 90 countries and globally integrated technology platforms, TTS continues to lead the way in offering the industry's most comprehensive range of digitally enabled treasury, trade and liquidity management solutions.
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