You've Been Pre-Rejected

MasterCard's inControl corporate card will let employers set strict limits on expense accounts
Nora Krug

Two courtside tickets to an NBA game: $600. Five-course dinner with your client afterward: $300. E-mail from your boss at 8:15 a.m. the next day asking what company business took you to a champagne bar at 2 a.m.: priceless.

This scenario could become a reality at offices around the world, courtesy of MasterCard. In partnership with Royal Bank of Scotland, the credit-card giant is launching a corporate card that allows companies to set strict parameters on which restaurants, bars, and hotels their employees can patronize.

The introduction of MasterCard's inControl credit card couldn't be better timed. As the economy falters, many companies are scrambling to trim travel and expense budgets, bumping workers from business class to economy and cutting back per diem food allowances for road warriors. Next up, MasterCard is looking to pitch a version of the card to parents who want to keep closer tabs on their offspring's spending habits.

Here's how inControl works: Using a Web-based interface developed by Orbiscom, a Dublin-based payments technology firm, a supervisor can set an overall spending limit for an individual employee or an entire staff category, as well as compile a list of approved hotels and restaurants (Pret A Manger, O.K.; Chez Panisse, not). They can also choose to have charges declined after a certain hour or at questionable establishments. Micromanagers will thrill at a feature that allows them to receive real-time updates on their employees' spending via e-mail or text message. The system also allows companies to issue staff or outside contractors cards that may be good for just one purchase or that expire in only one week. "It will help reduce maverick spending, improve compliance with corporate policies, and simplify accounting," says Steve Abrams, MasterCard's global head of commercial payments.

FRAUD FIGHTER

The inControl card is central to MasterCard's ambitions of grabbing a bigger slice of the corporate-card market, where it currently trails American Express (AXP) and Visa (V) with a nearly 23% share, according to figures compiled by The Nilson Report, a leading trade publication. Raghav Prasad, head of commercial cards for Royal Bank of Scotland, MasterCard's partner in the venture, says the bank is in talks with four companies in Britain that are interested in adopting the card. No date has been set yet for a U.S. roll-out, but MasterCard has been fielding inquiries from several U.S. government agencies after presenting the product at a recent conference in Washington.

The biggest impact of the new technology may be felt when the inControl cards trickle out into the consumer market early next year. Software that allows cardholders to control when and where their cards can be used may help cut back on identity theft and fraud, which in the U.S. alone amounts to $45 billion a year, according to Javelin Strategy & Research, a financial-services payment research company. "This is the wave of the future," says Javelin President James Van Dyke.

MasterCard is already in talks with various issuers to create a credit card targeted at college students. Parents could program the cards so they receive a text message if their son is racking up charges for late-night pizza deliveries or if their daughter is about to exceed the limit. MasterCard's Abrams, who has one child in college and another who just graduated, can't wait to put his latest product to the test. "I would like to have controls on geography," he says. "I don't want them to be purchasing on Web sites outside the U.S., Canada, and maybe Britain."

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