To capture part of a resurgence in corporate spending as the economy recovers from the recession, Citigroup Inc. on May 25 introduced the Citi Project card, a commercial card enabling organizations to isolate and control spending on specific projects.
The card, available immediately in North America and in most parts of the world next year, aims to slash the paperwork associated with projects such as launching a product or expanding to a new location, Paul Horn, Citi global director, commercial cards, tells PaymentsSource.
Once a Project card is set up, each expenditure made with it is grouped with built-in spending controls to ensure employees are using appropriate vendors and staying within preset spending limits and timeframes, Citi says.
“The breakthrough here is the ability to link a card to a project instead of tying each individual transaction to the project, and in the process you’re potentially eliminating a whole lot of separate invoices and purchase orders that tend to tie up projects at corporations,” Horn says.
Project expenditures made with the card are typically paid in one lump sum for each pay cycle instead of spreading them across multiple payment channels and across various commercial cards, Horn says.
Each project card has an initial credit limit to ensure projects stay within budget, but corporations can adjust those limits as necessary, adds Julie Lubell, Citi’s global product manager for commercial cards.
The new card relies on technology similar to what Citi uses for its Meeting card, introduced last year (
“The Project card provides detailed, streamlined reporting for expenditures within a wide range of types of projects that could even encompass meetings and events,” she says.
The Project card is available through either the Visa Inc. or MasterCard Worldwide brands, and can be structured as a revolving-credit or charge card, Lubell says.
The technology that controls and sorts purchases made with commercial credit and charge cards is not new, Patricia McGinnis, a director at Mercator Advisory Group, tells PaymentsSource.
Moreover, American Express Co. offers a feature called “Preset Spend” on its corporate cards enabling customers to set limits on the amounts and timeframe of spending for specific projects, meetings and events, a spokesperson for the company tells PaymentsSource.
AmEx’s feature also provides detailed, customized online reports tracking preset expenditures and within the past few months it became available in 14 markets worldwide, the spokesperson says.
Citi clearly hopes to use its Project card to “repackage” and expand global availability of its controlled-spending products to drive new business from existing customers, McGinnis says.
“Citi is harnessing an existing technology to bundle certain products and features together to increase their appeal to specific kinds of users in new markets,” she says.
The global reach Citi plans for the Project card is also significant, McGinnis notes.
Commercial card volume declined sharply in 2008 and 2009 during the recession, but in 2010 commercial card spending grew, she says.
“Citi is making a big play here to let its global customers where it has local-issuing and local-currency capabilities, which is a big deal as the global economy picks up again.”
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