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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.
Automated Expense Management: A Growing Trend in Fintech
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. Navaan (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.
Navan Connect: A New Product from Navan
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.
The Benefits of Automated Expense Management
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.
"When we talk with customers, some of them want our cards and they want our credit, but we also see – especially larger companies – some who have existing banking relationships and corporate cards who want better tools to manage their employees," Sindicich told TechCrunch. "In the past when you are going with one of the new players, including Navan, you are beholden to taking the cards they issue. But what we’ve done allows us to connect with the Visas and Mastercards of the world and still get that real-time reconciliation."
Navan’s Business Model
Historically, Sindicich explained, Navan has generated revenue from interchange fees, as well as from its subscription-based expense management software.
"We have a business model that’s based on transactional fees, as well as recurring revenue from our software," he said. "And with this new product, we’re able to offer even more value to our customers by giving them the ability to connect their existing corporate cards to our platform."
The Future of Fintech and Automated Expense Management
Navan’s launch of Navan Connect is just one example of how fintech companies are evolving to meet the changing needs of businesses. As companies look for ways to streamline their expense reporting processes, automated expense management solutions like Navan Connect are becoming increasingly popular.
With its patented card-link technology, Navan has created a solution that can be used in conjunction with existing corporate cards, making it an attractive option for companies that don’t want to switch providers but still want to take advantage of the benefits of automated expense management.
Conclusion
In conclusion, the launch of Navan Connect represents a significant development in the fintech industry. By offering a solution that can be used with existing corporate cards, Navan is addressing a major pain point for companies looking to streamline their expense reporting processes.
As the demand for automated expense management solutions continues to grow, it will be interesting to see how other fintech companies respond. Will they follow in Navan’s footsteps and develop similar solutions, or will they take a different approach? Only time will tell, but one thing is certain – the future of fintech looks bright.
Related Stories
- Prepaid payments platform Recharge raises €45M to go on M&A spree: In related news, prepaid payments platform Recharge has raised €45 million in funding to fuel its acquisition strategy. The company’s platform allows businesses to offer prepaid cards and virtual accounts to their customers.
- Hyperline secures $10 million for its automated billing platform: Another fintech company, Hyperline, has secured $10 million in funding for its automated billing platform. The platform uses AI to automate the billing process, reducing the time and effort required by businesses to send invoices to their customers.
Fintech News Roundup
Here are some other recent stories from the fintech world:
- Amazon to buy Indian BNPL startup Axio for over $150M: Amazon is reportedly set to acquire Indian BNPL (buy now, pay later) startup Axio for over $150 million. The acquisition is part of Amazon’s efforts to expand its presence in the Indian market.
- Colossal Biosciences raises $200M at $10.2B valuation to bring back woolly mammoths: Colossal Biosciences has raised $200 million in funding, valuing the company at $10.2 billion. The company’s goal is to use gene editing technology to bring back extinct species, including the woolly mammoth.
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