As Bank of Montreal continues forming alliances with international partner banks, it is looking toward Asian markets to help it compete in the commercial card markets against large rivals in general and American Express Co. in particular.
Terry D. Wellesley, the managing director of Bank of Montreal's BMO Harris ePurchasing Solutions unit, said last week that the company was in discussions with banks in four Asian countries and planned to announce at least two of those commercial card alliances in the next two months.
Bank of Montreal's corporate payments technology enables clients to obtain details on their global spending, including data on spending by individual country and a worldwide summary in a single currency. By offering corporate clients access to such specific spending information through the BMO Harris Details Online database, Bank of Montreal can vie with the information-reporting offerings of larger commercial card issuers, including Amex and JPMorgan Chase & Co.
The goal with international alliances is to have "one really strong banking relationship by country," with MasterCard Inc.-affiliated banks, Mr. Wellesley said. The alliances have "no financial offset" to either party.
"It's at mutual consent that we're both going to do the same thing for each partner," he said. "It's about data transfer."
Mr. Wellesley said Bank of Montreal was considering China, Hong Kong, Singapore, Thailand, Taiwan, and Indonesia. "We're really going to cover that area of the world pretty extensively over the next several months," he said. The company hopes to gain a "broader spectrum than American Express" in Asia, especially in China, where Bank of Montreal has a partnership with China Merchants Bank. (It also has partners in Australia, Japan, and Malaysia.)
On April 7 Bank of Montreal announced alliances with Italy's Banca Popolare di Milano and India's HDFC Bank; it currently has alliances with 13 such partners and is aiming for about 32, Mr. Wellesley said. Though Asia is the current focus, the company also plans to expand in Europe and move into Africa.
Philip J. Philliou, a partner at the New York payments consulting firm Philliou Selwanes Partners LLC and a former executive at MasterCard and Amex, said most parts of Asia, especially China, present "wide open" opportunities for commercial card issuers. "Nobody has a good market presence" in China, and Bank of Montreal's network affiliation may boost its expansion efforts in Asia, he said.
"MasterCard has a very dynamic office in Singapore and in Hong Kong," he said.
Gail Wasserman, a spokeswoman for Amex, said: "Imitation is the sincerest form of flattery. … More than 60% of Fortune 500 companies are our clients," and Amex has a "very robust business" in Asia.
Mr. Wellesley said his goal is "to be in the top five" among commercial card issuers "in the next few years, and we're not that far away." Recent developments in the payments card field may help, notably Amex's acquisition of the corporate payments unit of General Electric Co.'s GE Money last month. That is "one less competitor," Mr. Wellesley said. It "opens doors for us in a lot of ways, in Canada, U.S., and multinationals."
Mr. Philliou agreed that "anytime you have a portfolio flip, it gives companies the opportunity to think about rebidding" for the commercial card contracts.
Bank of Montreal's strength lies in its "robust data capabilities and the reporting capabilities," Mr. Philliou said. The purchasing cards sector is "all about the data. … I think that's going to make them a stronger contender to Amex."
