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Cards Overtake Cash to Become King

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The imperative in 21st-century business is to act quickly, whether in adopting new technology, dealing with customer enquiries or seizing new opportunities. But speed has to be accompanied by accountability and control.

 

As Adil Husain, managing director of Asia-based business consultancy Emerging Strategy explains, corporate cards have become a key tool for companies to retain visibility of employee spending.

 

He says, “In business culture in most parts of Asia, entertainment is a big expense category, so employers have been looking for ways to gain transparency and a better handle on what employees are engaged in. That has driven adoption of corporate cards.”

 

The Chinese government is also keen to promote the use of corporate cards in order to minimise corruption and increase transparency and compliance. In December 2011, the Chinese authorities announced that cash could no longer be used to pay for a wide range of government expenses, including travel payments, conference fees and “official hospitality.” 

 

The Ministry of Finance argued that corporate cards “can boost fiscal transparency, contribute to anticorruption efforts, eliminate fraud and tighten financial control,” according to Emerging Strategy’s 2013 paper “Government Use of Credit Cards in China,” authored by Mr. Husain.

 

“Government use of corporate cards is at the forefront of the development of China’s corporate bank-card industry, since it promotes the use of non-cash payment instruments, reduced cash handling and more transparent and accountable financial transactions,” says Mr. Husain.

 



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