Let’s face it – nobody enjoys doing their expenses, and HR departments usually find the process just as tedious. This is particularly true when it comes to your employees travelling abroad. Having already given up their time to travel on business, the last thing they will want is to file their expenses, but if not done properly it can lead to employees being left out of pocket.
Business travellers these days will more than likely use their own credit and debit cards (where company cards are not available) to pay whilst on business trips. This removes the need to worry about cash and estimate total budgets before heading abroad. However, using a personal credit or debit card also means that expenses need to be claimed in a timely manner, usually by looking back through bank statements and matching them with receipts.
As a result, your employees want their payments to appear in a clear and succinct way on their bank statements so that they are easy to find, and easy to understand for the HR department. They do not necessarily want their payments appearing separate from additional charges, or showing up many days later.
The growth of contactless payments has added another layer of complexity to this. Brits have fallen in love with contactless payments while at home, with one in four payments now being made using a contactless card or mobile payment service like Apple or Android Pay. Unsurprisingly then, British business travellers are also looking to pay using their contactless cards while on their trips abroad, at least where the technology is available.
There is no doubt that contactless payments save time at the point of transaction, but they might be costing business travellers much more time when they come to compile and claim their expenses. This is for two main reasons.
Firstly, unlike some other card transactions, contactless payments do not appear immediately on bank statements. Usually they are charged hours or even days later. This makes it much more difficult for your employees to match up certain payments to certain days. It also means that they might have to wait several days before being able to submit their complete expenses for the trip.
Secondly, making a contactless payment abroad can have the effect of forfeiting the ability to choose what currency you want to make the payment in. When you make a payment abroad, there are usually two options – either to pay in the local currency, or to pay in the currency that you use in your home country. When a card transaction is made without using contactless, your employees can opt to use dynamic currency conversion (or DCC). This means the payment is made in the home currency, locking in the exchange rate, and factoring in all additional conversion charges. What is seen at the point of transaction is what will appear on the bank statement, and what can then ultimately be listed in expenses.
However, when making contact payments at a lower value (as the majority of contactless payments are), this choice for business travellers is removed. Instead, payment guidelines are such that there is an assumption that they have opted to pay in the local currency for these low value transactions. In this scenario, additional conversion charges from banks or card providers will be added on after the transaction takes place, and you may not be aware of the exchange rate or commission being used. This creates more delays and confusion. Not only is the contactless payment unlikely to appear on the account on the same day as the transaction, additional charges that are part of the final transaction cost will also not appear until later. While DCC is available for higher value contactless payments, this doesn't include the vast majority of payments your employees will want to make, including taxis, lunches, or drinks with clients.
Business travellers may still prefer to make contactless payments on their business trips, and it is not always the case that one payment option is better than another. However, ensuring that your employees know the consequences of making contactless payments before they jet off abroad for their business trips will help avoid any unnecessary confusion or delays at the other end.