Why we made the Expensify Card unlike any other
tl;dr- Over 10 years in the making, Expensify has launched the world's smartest corporate card, with market-first daily settlement, unapproved expense limits, and realtime compliance features that enable the highest spend within the safest limits — and the greatest eReceipt coverage of any corporate card. It's available right now, is completely free, and can be enabled in just two clicks. Go to card.expensify.com to get yours!
It's a little known fact that Expensify originally launched as a pure corporate card back in 2008 (see TechCrunch: Expensify - The Corporate Card For The Rest Of Us). It was a fun, small project that I could do as a single programmer over ten years ago. However, immediately after doing so I received one overwhelming piece of feedback: you can have expense management without a card, but you can't have a card without expense management. Basically, a card is cool and all, but by itself it's kind of like a bridge halfway across a river. It's one piece of the puzzle, but not a very useful piece on its own.
Enlightened by this more holistic vision and recognizing this bigger opportunity, I did my second "pivot" (the first is a longer story I'll talk about some other time) to build a comprehensive solution to the expense management problem from every angle. Ten years later, we are getting back to our roots to disrupt the corporate card space like we set out to from the start. But of the many (oh so many…) lessons learned over those ten years, the most important was this: the world doesn't need another flashy card or another cheap perk. Disrupting the corporate card space means rethinking things at a deeper level, starting with such a core staple you wouldn't even consider it up for discussion: the monthly statement.
Everyone knows how a company card works: your company gets some wimpy credit limit, you split it up between your employees, they make purchases, and then at the end of the month you go through every purchase to make sure it seems legit, then pay the giant bill (with fingers crossed that nobody bought anything that you can't afford). Easy peasy. We work with hundreds of thousands of companies with various kinds of credit cards, so we have seen basically every variation of this process under the sun. And every step of that process above is associated with an incredibly common pain point:
- Credit limits are too low (or hit your personal credit). Traditional banks are about as risk-averse as you can get, and most small businesses don't have the history or assets to get a decent credit limit by themselves, so the owner typically needs to put their own assets on the line. This means employees aren't just spending company money — they are in effect spending the business owner's money, as that's who will be on the hook if the company can't pay the bill.
- Reconciliation is a nightmare. Regardless of who is footing the bill, it's certainly not the employee, so they have little incentive to snap the receipt (or code the expense), forcing the admin to nag everybody in the company at the end of every single month just to keep the tax authority off their backs — not to mention, verify that nobody is just taking their card to the movies.
- More credit == more anxiety. Even if you can get a high limit, it's straight up terrifying closing the books every month because it's unclear just how big a bill you are going to get — and it's not always certain that there will be enough cash to cover it in time to avoid impacting your business (or personal) credit score.
Every other card provider seems to be so busy monkeying around with silly gimmicks — like trying to convince you that life would be so much better if the admin had a bunch of ambiguously-valued "points" (typically to use on personal travel), or the company got some insignificant "cashback" worth a penny on the dollar (as if any business's success really hinges on that 1% margin of error) — that there isn't a lot of innovation trying to solve the real underlying problems that affect admins and cardholders alike on a daily basis.
Granted, this can be explained to a degree by the "golden hammer" problem: if you aren't tightly integrated with expense management, these kinds of gimmicks are the only tool in your toolbox to differentiate yourself. But our research suggests that the real pain points cannot be solved with complex perk schemes, and arise almost entirely from the monthly statement period. Thankfully we are able to tightly integrate Expensify and the Expensify Card, so we are uniquely capable of solving these problems in a way that has — so far as we can tell — never been tried before.
But first, let's talk about why the monthly statement period exists in the first place. When we raised the idea internally of questioning the monthly statement period, there were audible gasps. It's so universal, surely it must be right, right? But every time we sat down to explain its necessity, we came up short.
The most obvious explanation is that companies depend upon having a large line of credit to finance the business. But a quick look at our incredible trove of data showed that this cannot be true: nearly none of our countless customers actually carries a balance and thus ends up paying any finance charges — nearly everyone pays the statement in full every month. This makes sense because no business can survive long by spending money it doesn't have at credit card interest rates.
So the second explanation is that, ok, maybe they aren't financing their business, but companies depend on the 30-60 days of "free" credit to soften the blow of large purchases. Seems reasonable. But we know that everyone has a disappointingly small credit limit (relative to the total spend of the business), meaning that the "dampening effect" of a small amount of free credit must be correspondingly small — it's like putting tiny shock absorbers on a monster truck. Sure it might help with the little bumps, but the little bumps are never the problem, it's the big bumps that take you out.
Again and again when we try to explain the necessity and universality of the monthly billing cycle, we keep coming back to a very simple reason: habit. In particular, it is a strongly ingrained habit that originates from the days of mailing a physical check, a process that feels infeasible to do more often than monthly.
So we're going to do something crazy and blow up all that nonsense with a modern corporate card built for the modern world, without the baggage of that paper-based monthly billing cycle. Which is a long way of introducing a radical concept that is so obvious you won't believe it: daily settlement.
That's right, the Expensify Card just charges your bank account every day, for the purchases you make on that day. This has a number of important advantages:
1) We're not on the hook for your purchases, so we aren't motivated to limit your spend. We're not your mom; we aren't going to tell you how much you should spend, or what you should spend it on. This means that our card can safely give you scary high limits — easily the highest in the industry. We're like the first time you hit the gas in a Tesla, and you realize, "oh wow, this is way more acceleration than I realistically need… but I like it."
2) We're not on the hook for your purchases, so we aren't going to let you spend money you don't have. The Expensify Card monitors your balance every day, so if one of your employees goes crazy and buys something you can't afford, all cards will automatically turn off so you can figure out what to do. Going back to the Tesla, it's like when you are driving down the freeway with autopilot enabled, and you reach back to pick up your kid's dragon that fell on the floor, but you nudge the wheel with your knee nearly plowing you into the margin — but the car just decides to ignore that and keep going straight. This card won't let you (or your employees) spend you off a cliff.
3) We're not on the hook for your purchases, so we kinda don't care who you are. To be clear, you are probably very cool, and we do need to know who you are and make sure you aren't laundering money (the government is quite insistent on that point). But we don't really care about your personal credit history, how many factories you own, or your FICO score. So long as you have cash in the bank, let's dance — no need to put your personal credit score on the line.
In short, we're not a bank, and the card is not some ploy to lend you money. We're just trying to streamline your access to your existing cash. If you want to spend money you don't have, we're not for you. But so far as we can tell, the vast majority of our customers — especially the most successful of them — aren't spending money on T&E that they don't already have more than covered in the bank.
BUT WAIT THERE'S MORE. All of the above is just talking about one facet of the card — daily settlement. And it's a great one that I know you'll love. But there are at least two other major features that I'll just touch on (because this is getting rather long).
The first is what limit you set on each individual cardholder (i.e. your employee). In a traditional corporate card program, you set a monthly limit because… well just because that's what everyone does. But this means you need to anticipate the maximum amount they might need to ever spend in a given month — which is typically a lot higher than you would ideally extend as a line of credit. Given that the Expensify Card is an extension of Expensify's approval engine, we are discarding this artificial monthly limit with something we call an unapproved expense limit.
Basically, if the cardholder fails to submit their expenses (or you decide not to approve them), the card will turn off when over a certain amount of unapproved expenses have accumulated on the card — and stay off until the cardholder submits those expenses (or resolves the issues that prevent them from being automatically submitted) and you approve. This creates a natural incentive for cardholders to submit their expenses (or fix their violations), because if they don't, the card will stop working. This avoids the common problem of accidentally extending 3-6x more credit to someone than you really wanted to (due to corporate card-holding employees being notorious for going 3-6 months without submitting expense reports).
Additionally, when combined with our Scheduled Submit, Concierge DoubleCheck, and automatic approval features, this means that the card never stops working — no matter how much spend runs through the card — so long as it's all within the tightly enforced expense policy you specify on a per-category basis. Which is a good segue to the second feature I want to highlight: realtime compliance.
You might recall that Expensify was the very first expense management mobile app, and we made our name on "realtime expense management" (where you just snap a picture of the receipt and we take care of literally everything else). And I mentioned above that a core strength of Expensify is we're not a one-trick pony: the card is just one of many tools we use to help you manage your expenses, and all of them are tightly integrated. This philosophy results in the Expensify Card being an extension of the Expensify mobile app, such that after each purchase, the app will notify you within seconds — while you are still standing there at the cash register — exactly what you need to do (if anything) to finish coding that expense. If you need to scan the receipt, you'll be notified instantly, and with a tap you can do it right there, before you leave the table.
Which brings me to the final feature I'll highlight in this long email — eReceipts. This by itself isn't a new feature, we've long offered IRS-ready digital receipts for purchases made on imported cards. And we guarantee them: if the IRS audits you and rejects any of our receipts, we will pay the difference in tax. (Spoiler: in the decade we've been issuing eReceipts, the IRS has never ever rejected a single one.) But thanks to our owning the full stack of the Expensify Card — from swipe to settlement — we can offer eReceipts for vastly more purchases than anyone else in the industry: nearly 9 out of every 10 purchases will have an eReceipt!
The upshot of all that is when you use the Expensify Card, the typical experience is that you swipe the card, and get notified that everything has been automatically taken care of — receipt, coding, everything. The expense is submitted to your company, verified a dozen ways by Concierge to confirm it's within policy, and then automatically approved and pushed to your accounting package. (Oh, I didn't talk about automatic reconciliation of every Expensify Card purchase within your accounting package — no need to reconcile outside the system, another industry-first for a corporate card — resulting from it being tightly integrated with expense management. But this email is already too long.)
Anyway, there's a lot to talk about — more than I can cover here. But like the Matrix, the best way to learn about the card is to see it for yourself. Luckily it's super simple to get: as few as two clicks (if you are already using our next-day reimbursement engine, which is free and super fast), no red pill needed. Go to card.expensify.com to get yours mailed to you, and start living the future today! (Or in a couple days, as fast as we can ship the card to you.)
Founder and CEO of Expensify