Payment card data drives the newest breed of corporate-expense tools
As faster payments change how quickly companies get paid, these same organizations are looking to add speed to the way they manage internal expenses.
Emburse this month launched a card-based expenses solution that resolves corporate expenses in real time, joining a field of other venture capital-backed expense solutions including Brex, Divvy and Bento for Business that aim to replace monthly expense reports with new digital approaches.
Center, a Seattle-based startup, is the latest to enter the fray with a product that leverages payment card data with AI and ML to solve expense-management problems for midsize companies whose employees are making more purchases online and on the fly.A key to Center's service is leveraging real-time payment card data to compare the time, location and type of merchant with companies' expense-management policies so corrections can be addressed immediately, versus waiting until an expense account is filed days or months later.
One particular pain point Center aims to attack is the proliferation of expenses employees buy through e-commerce sites and apps, including software subscriptions and digital goods, according to Naveen Singh, Center’s CEO.
Singh, son of Steve Singh who co-founded the corporate expense management platform Concur in the 1990s—now owned by SAP—saw an opportunity to develop a platform optimized to manage these emerging types of expenses.
“Employees at growing companies are often using their personal cards to buy software subscriptions and other corporate services, which creates a lot of hassles for back-office staffs and puts burdens on employees juggling credit balances,” Singh said.
Center automatically checks and closes expense reports, eliminating manual processes and speeding up expense-report reconciliation. In a survey of 250 businesses Center conducted last year, 40% of midsize businesses said they manually audit each expense report, while about 12% conduct no audits at all.
Center Expense, the software backing the product, analyzes card transaction and approves or flags purchases for review, based on controls managers establish. ML provides additional insights to allow or block transactions based on exceptions required by unusual conditions or employee behavior.
“Most expense-management platforms control spending by enforcing fixed policies, but our AI and ML help spot wasteful spending that can slip by with inflexible rules and also allow for exceptions when necessary,” Singh said.
The CenterCard mobile app prompts card users to snap photos or upload online receipts for purchases the moment the transaction occurs, moving expenses toward immediate reconciliation.
While some companies using Center still handle certain one-time and recurring expenses through invoices or ACH payments, Center’s experience during the beta-testing phase suggests most midsize companies use cards for the majority of employee expenses because of their ubiquitous acceptance. Companies can opt to use virtual and/or physical versions of CenterCard, Singh said.
After testing the solution for several months with more than a dozen companies, Center is launching CenterCard, a Visa debit card attached to a mobile app that companies may distribute to all or some of their employees with the ability for managers to switch card availability on or off.
Center charges companies $10 per user and also earns revenue on card interchange.