Cards businesses are more closely aligning with the broader treasury and cash management organizations, taking a more general payables and receivables approach, while blending cards into the mix. This is the longer term trend. Of course the "pandemic effect" of rapid e-payments adoption was a constant across most discussions at the recent Commercial Payments International (CPI) summit, held in cyberspace, where Mercator was able to directly participate in a moderator capacity.
Since its inception in 2008, CPI, part of The Economist Group, has been holding their annual Summit event in New York City. The on-site event was transformed into a virtual program in 2020 due to the obvious pandemic concerns and travel restrictions. CPI events serve as a more intimate gathering of B2B payments professionals, and traditionally have been comprised of delegates from the commercial cards industry, including issuers, acquirers, TPSPs and networks, but more recently have included fintechs, end-users and suppliers.
Having attended a number of the past CPI events in New York, it is clear that the nature of the agenda is continuing to adapt to the rapidly changing global B2B payments environment, while maintaining a core focus on the commercial cards business. It is a unique event, being both relevant and enlightening for attendees, while also retaining a comfortable and accessible atmosphere.
Since the events are scaled to this specific audience, they create both digestible and directly relevant content, with more intimate networking opportunities (remote networking not so much). The CPI conference schedule itself has grown from a single NYC event to what is now five different annual conferences across three continents, including an upcoming virtual middle market event that usually takes place in Chicago. Mercator will be moderating several panels at the middle market conference, as we did at the CPI Summit. Given the size of the CPI virtual event over two days, the CPI agenda maintained the typically manageable schedule one would have had if held onsite (unlike the large Sibos and AFP annual events, which had to precipitously scale back their 2020 virtual sessions). Although sessions were generally informative, the virtual experience is not the same as in-person events, particularly impacting the ability to network and gain conversational insights.
Key Event Takeaways
Pandemic impacts to the industry have been massive on the travel side and were discussed in both specifically tailored sessions and as a background topic in most others. In one session involving Amex, Barclays and Amadeus, the panel discussed industry responses to COVID-19 and what's next. An interesting point of view expressed by all was their company responses to the crisis in the areas of adaptation, service, and re-engagement with clients. They talked about client re-emphasis on employee well-being, safety, relocation and critical meetings. While some domestic travel has started to return, especially in China and parts of Europe, the long-haul space remains a longer term issue with country restrictions, quarantines, testing and inconsistencies causing resistance to international travel.
Participants found it difficult to answer the inevitable question around business travel expectations in 2021 and beyond, simply because too many variables can affect the outcome in both directions. We have covered some of these in other blogs as well.
In a separate session involving card networks and money center bank executives, the panel was tasked with making sense of this broader new world. A Citi exec described the immediate COVID-19 response in terms of supporting working groups around the globe who were in various forms of lockdown, but still needed to assist corporate clients. One quickly adopted response was the regulatory relaxation of e-signature requirements, which allowed for faster responses to client needs for new services.
A Visa exec discussed how SMEs, in many cases, did not have any method for doing business online, which was an existential threat. Therefore, they helped stand up these capabilities.
Mastercard talked about many of the capabilities for better financial operations that have been in place, with the pandemic functioning as a wake-up call against corporate inertia and true cash management focus.
It is clear that suppliers have become more accommodating to card acceptance during the pandemic, but the question of this new paradigm's longevity was discussed, with generally positive expectations. The "five years from now" question revealed the most successful approach to be the acceptance of ISO 20022 as an ubiquitous standard, along with flexible payments offerings.
Automation trends are definitely a hot topic, with several issuers expressing a fair amount of optimism around B2B as a result of the fast changeover from paper due to e-commerce and working capital needs. This rapid transition will fill in spend gaps from recessionary economies.
Regional differences are predominantly centered on adoption of B2B versus corporate cards, as well as the propensity for contactless. Issuers seem to think that economies across Asia and the Middle East will have mobile and virtual card priorities. In a session we moderated on LAC (Latin America Caribbean), the expected adoption of virtual cards and general payables automation will be happening over the next five years.
In summary, the CPI virtual event was in many ways similar to the themes and topics we found in the payments track for the Sibos 2020 online event, for which we have released a member Viewpoint. We will also be summarizing the AFP 2020 Virtual Experience, which takes place this week.
Please feel free to reach out for additional discussion on these or other commercial payments topics.