Navan takes a swipe at expense management startups with new Mastercard and Visa partnerships
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In recent years, a number of startups have made a business out of providing corporate credit cards to companies. These players compete not only with each other but with legacy providers such as Concur and Expensify by offering automated expense management.
Many of these startups generate revenue from interchange fees, meaning that they receive a certain percentage of each transaction made on the corporate card they have provided. Ramp, for example, is one such company. Some of those startups also make money by charging subscriptions for their expense management software. Brex, which started out as primarily a corporate card provider, made a big push last year into software.
Navan (formerly known as TripActions) offers both a corporate card as well as a subscription to its software. In a twist, the company today is announcing the launch of a new product called Navan Connect, which it describes as a patented card-link technology that gives businesses a way to offer automated expense management and reconciliation without having to change their corporate card provider. For the initial launch, Navan has partnered with Mastercard and Visa, with plans to announce additional network tie-ups in the near future.
The move is significant in that Navan is essentially addressing a presumably large market of companies that would prefer to continue working with an existing bank partner for a variety of reasons but want the option to offer more modern ways to manage expenses. Filing expense reports is by far one of employees’ least favorite tasks, but the rationale behind automating the process goes beyond simply eliminating expense reports – it also is aimed at giving companies more insight into how and where employees are spending so that it can identify ways to trim costs in the future and ensure company policy is applied onto the card.
Now, by integrating Navan’s technology, any corporate Visa or Mastercard user would have the option to do things like set policies and budgets they’re trying to administer and then have all expenses automatically reconciled and filed, according to Michael Sindicich, executive vice president and general manager of Navan Expense.
Navan appears to not be concerned about its new Connect product competing with its own corporate card offering.
Historically, Sindicich said, Navan has charged licensing fees and software fees for its expense and travel products. It charges trip fees, and sometimes implementation fees. And it makes ‘some commissions’ from suppliers and some interchange commissions from card swipes.
Ref: techcrunch
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