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May 17, 2018

Mastercard: Corporate cards provide better cost savings

A new survey conducted by Mastercard in alliance with Kaiser Associates has revealed significant cost savings for organisations which switch to corporate cards from Per Diems, daily allowance paid to cover expenses of employees travelling for work.

Data further revealed improved operational procedures and decreased T&E expenses with corporate card programmes.

The survey involved 26 large and medium-sized organisations in certain markets across the Middle East and Africa such as the UAE, Saudi Arabia, South Africa, Jordan and Kenya.

During the study, Mastercard obtained understanding on the Per Diem usage procedures and costs, and compared the findings with corporate cards.

Substantial operational costs were found to be associated with each Per Diem trip, with factors like fraud and error correction, approval processes and dispute resolution constituting 8.2% of the average spend.

Meanwhile, card programmes offer more efficient operational procedures and other benefits such as travel insurance and rewards, the report says.

By switching from Per Diems to corporate cards, organisations on average can save 7.8% of the average overall T&E spend.

Mastercard head of commercial products for Middle East and Africa Adam Jones said: “The value of commercial cards to deliver automation, transparency and governance to a CFO has never been in question.

“What we have also seen quantified from this research is that T&E budgetary savings can be added when these business tools are used.”

The study also revealed opportunities for corporate card providers to drive the card use in the MEA region by educating their clients on the associated cost savings and efficiency gains.

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