As the newspapers regularly like to remind us, we are up to our eyeballs in debt. Current figures put consumer credit at £1 trillion, a figure that has sparked a national outcry and considerable column inches. It has also led to the vilification of the credit card: once our flexible friend, and now increasingly seen as a plastic peril. As a result, efforts are being made to encourage consumers to cut down on their plastic or literally cut it up in a bid to reduce the availability of cheap credit for unsustainable spending splurges.
But that’s in the consumer world. In the business world, the attitude to credit cards is very different, with companies increasingly recognising the advantages of plastic for expenses in terms of convenience for the spender and trackability for the organisation. As a consequence, the number of cards in circulation is rising as the banks convince their customers (companies of all sizes and in all sectors) of these benefits.
And of course, it’s not just the banks which are responsible for this: the credit card brands themselves have much to gain from this expanding market, and are obviously seeking to drive or facilitate this growth wherever possible. The man responsible for such efforts at Visa the largest global credit card company is Jonathan Nixon, head of sales and marketing, Visa Commercial Solutions Europe.
On first impressions, helping banks issue cards in an expanding market might appear a relatively straightforward and simple task money for old rope. But when the scale of the task is considered it enters another league. Nixon is responsible for a team of five with responsibility for 5000 member banks across 26 different countries in Europe. Clearly such a role is a significant logistical exercise and requires considerable planning, patience and a familiarity with airport lounges.
Regular business travel quickly loses its novelty, says Nixon. The travel part of my job doesn’t feel glamorous at 4:30am on a Monday morning, heading to Heathrow! he says, although he acknowledges, it does beat working behind the same desk from nine to five all year round. I’ve seen a lot of the world through this job.
If you could sum up Nixon’s role in one word it would be: relationships. His primary aim is to strengthen ties with member banks (Visa functions as a co-operative) and to encourage them to take up more Visa products and services. The ability to understand banks’ needs is fundamental. It’s about working with local partners to understand their parameters and their market, says Nixon. We must understand our customers and what infrastructure they require. This is constantly changing.
But whilst his role is entirely focused on relationships with banks who issue the cards, at no point does Nixon have any direct contact or interaction with its customers (the card-holders). As a result, he acknowledges that the sales element of his job probably takes precedence over the marketing functions.
Sales on a consultative basis is what I’m used to, explains Nixon. I’ve always worked with commercial people, even when I worked in law. Marketing has always been an aspect of my job, but it’s not something I’ve ever set out to be involved with. In a way, I’ve fallen into it.
Nonetheless, he acknowledges that marketing is a significant component of his job, and will almost certainly play a greater role moving forwards as Visa Commercial Solutions strives to hit bigger and bigger targets, both in terms of marketing the Visa brand, and helping banks market themselves. As a consequence, it produces sales and marketing materials to help banks market their credit card products. For example, the arrival of chip-based security technology within cards has created challenges. The ‘real estate’ of the card has been reduced by chip and pin, says Nixon, and company branding and the shape of the cards are issues of concern. He says Visa is working with the banks to help maximise the effectiveness of cards as branding vehicles given the new constraints.
Nixon is also involved in multinational conferences and seminars with member banks, seeking to maintain open channels. The objective is to gain the best possible relationship leverage given the relatively small sales and marketing team. As Nixon diplomatically explains, We have a finite marketing resource, and don’t want to be led up any blind alleys.
Although Visa is owned by its member banks, these banks may also be members of rival payment networks and therefore Visa has to continue marketing to its members to keep its brand and its products and services at front-of-mind. The aim is to remain the world’s number one financial services brand.
But whilst competition comes from rival payment cards, it also comes from elsewhere. Our research shows that this is less from other card brands, and more from cheque, cash and direct debit.
Visa’s objective, therefore, is to help banks convince their customers that paying by credit card is the best option, and as a result has a range of commercial card products to help meet corporate requirements. It also has to encourage banks to tailor these services, as demand varies between different markets where different dynamics are at play.
The products we promote depends on the local market and the aptitude of the local bank, explains Nixon. But we don’t just want to be order takers. Part of our role is to say ‘have you thought of this?’ It is a changing market and there are lots of opportunities. Clearly the intention is to drive demand or at least propose alternatives or opportunities in subtle ways.
There are three core products or offerings that comprise Visa Commercial Solutions’ range: Visa Business is a card solution targeted at the SME market; Visa Purchasing is designed for purchasing personnel in medium to large companies; and Visa Corporate is designed for business travellers at large companies with considerable T&E (travel and expenses) budgets.
The T&E data we provide clients is proving ever more important in helping them analyse spend, he explains, and given the growing level of scrutiny of corporate expenses the benefits of such a system is becoming increasingly apparent to businesses.
Different products will be relevant to different countries at different times, and given the diversity of Europe, there are various speeds of adoption for the various products.
For example: Nixon explains that in the EU accession countries, (part of the CEEMEA region Central & Eastern Europe, Middle East & Africa which also falls under his remit) the majority of business card transactions are cash withdrawals from ATMs, which are then used to pay for goods.
This is a world away from the UK, Visa’s largest European market, where card use is extremely sophisticated and diverse. We have to be all things to all people, says Nixon.
Going forward, such a role presents considerable challenges. Eastern Europe is recognised as a key growth market by the card networks, but at the same time opportunities exist in more advanced economies such as the UK. Nixon’s team of five is tasked with facilitating and delivering them all. We have to provide the right service, he comments. The aim is for banks to consider us to be part of their team.
With targets moving ever upwards, the pressure on Nixon and his team to deliver is only likely to escalate. Yet he seems unphased by this, and given the success of credit cards in achieving such dominance in UK consumer spending, and the power of the Visa global brand, there is surely every chance that they will be achieved and maybe even exceeded.
Who knows, recognition of the usefulness of credit cards as corporate tools may even go some way to eroding the media-fueled fear that they are damaging society.
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