Travel Payment Methods

» Posted by on Aug 16, 2014 in Payment Methods | 0 comments

GSA now has “Smart Pay 2” as its travel card, but it was not the first or even second card to be used by GSA.  While I am not old enough to have first hand knowledge I do have a dinosaur around the house (love you honey) who happened to have used three of the four GSA issued credit cards during his military and government service. The first was Diners Card while it may be one of the oldest credit cards in the world it was not taken in many place within the United States such as fast food places, small chain motels/hotels, and rental moving trucks, which many lower level GSA/military personnel often used to stay within their per diem rate and reimbursable expenses while traveling or relocating for business. However the Diners Card did not have these same limitation overseas in the Asian and Europe, in fact it was so widely accepted it made it very easy to abuse with the quick exchange rate of currencies often give you two to three times buying power in local currency. The biggest issue was not with the card as much as the system of educating supervisors, users, and chain of command reviewers on proper expenditures, setting appropriate spending limits, and review for / react to fraudulent claims.

In 1993 AMEX won the GSA contract over Diners card which at the time account for up 10% of the Diner Club/Citicorp subsidiary’s worldwide charge volume and about 40% of its roughly 2 million-cardholder domestic operation. While AMEX was stronger in the United States It was weaker in many place overseas to include ATM use which often meant carrying large amounts of cash/travels checks(which often were not excepted) or local currency, which created problems with your finance department in maintain and exchanging local currency during spiking exchange rates. But lets put all that aside and return to one of two big issue with the AMEX of old; 1. No one had update the policies and procedures from when it was  Diner Club, the same poor training of supervisors, managers, card holders and reviewers was still being done while the abuse was expanding. 2. There was one thing different about AMEX, the credit balance need to be settled in 30 days, in 35 days they froze the card for unpaid balances and in 90 days they canceled the card for unpaid balances. At the time due to the number of increased deployments and the number departments operating in overseas area, finance created a central point in Germany to handle all voucher settlements in the western Europe area which had a three week turnaround from the time a satellite office submitted a voucher (which had to be reviewed and signed by two separate reviewing authorities) until the received the error free (any error could result in a week of wasted time on someone’s desk) approved settlement back. While this worked well for the yearly traveler it posed a problem or two for the monthly traveler or the person gone over 45 days but less than 60.  The bottom line is the check was in the mail but you were in the field, while left was more secure and help you pay fast it didn’t help much if an error had been missed and you were shorted on the settlement AMEX had to be paid (oh and that did not always unfreeze a frozen card).

by Kimberly Hubbard

Submit a Comment