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Why we made the Expensify Card unlike any other

David BarrettDavid Barrett Expensify Success CoachPosts: 2Expensify Success Coach Expensify Success Coach
edited October 7 in Important

tl;dr- Over 10 years in the making, Expensify has launched the world's smartest corporate card, with market-first daily settlementunapproved 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.)

-david

Founder and CEO of Expensify

Comments

  • thgoepelthgoepel Posts: 1Expensify Customer

    That is a great addition and would be great for us to add. I have a question on the card though. I saw it is a Visa card but it did not state if it will support Apple Pay. I know many Visa Cards do, but will the Expensify Card be able to be added to Apple Wallet so you can use the convenience of Apple Pay when using it?

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach

    Hi @thgoepel, great question and I'm glad you're getting excited to use the card. Contactless payments or NFC, is a feature we're testing out and we plan to add support for it.

    I don't have an eta to share but will update this thread once I do!

  • joejoejoejoe Posts: 1Expensify Customer

    where can one get the details of the card? ie protections for fraud? is the card expense management any different from how third-party cards are handled in expensify currently? I guess my main question is what is the benefit to this card vs the many other business cards out there?

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach

    Hi @joejoe, thanks for posting! You can find the information regarding Expensify card here.

    In terms of expense management compared to other third-party card connections, the major difference is ease of use and control, which I'll cover in the highlights below.

    • Daily settlement let's you give employees access to the money that's in your business bank account without worrying about receiving a larger than expected bill at the end of the month! Your limit is based on your available balance and settled daily!
    • You'll reduced unapproved expenses, encouraging employees to submit more frequently, as the Expensify Card shuts off for the cardholder once a maximum amount of unapproved expenses sits in their account. If they need to spend more, they will be prompted to submit their expenses and you're able to control this limit on a per-card level.
    • eReceipt support for Expensify Card expenses makes your employee's lives easier since the IRS accepts eReceipt for all but the largest of purchases.
    • Realtime compliance each time your cardholder uses the card. Whether you require a receipt or additional expense information, employees will receive a notification after using the card letting them know what they need to do next.
    • Continuous reconciliation is possible as Expensify Card charges sync to the cardholder's Expensify account as soon as they are incurred. No more waiting for the charge to post to the bank account before it can be imported into Expensify!

    If you're already using Expensify, the card makes sense because it removes barriers to simple and efficient expense reporting for you and your employees. You get additional benefits that make using Expensify easier and our cards are 100% free. You'll never have fees, interest, commitments, and no personal liability.

  • jaeqoih7jaeqoih7 Posts: 3Expensify Customer

    Hi David, this sounds impressive! Is this available just in the US or in other countries too?

  • bthornhillbthornhill Posts: 2Expensify Customer

    Sounds great! How does it handle credit card holds for such things as rental card or hotel room security holds? In other words, how does it handle pre-authorizations on traditional credit cards? Does it block off funds in your account that you can't use until those funds are released?

  • bthornhillbthornhill Posts: 2Expensify Customer

    One other quick thing: Are you able to get your company name or logo on the card? Just curious.

  • JohnDJohnD Posts: 1Expensify Customer

    We had this email go to a non employee that uses Expensify which caused confusion. Was the email only supposed to be sent to Admins or were other uses supposed to get this marketing?

  • alexgalexg Posts: 1Expensify Customer

    It sounds like only some charges on the cards will automatically attach an e-receipt. Sounds like users will probably through out all receipts assuming its an e-receipt. How will they know they need to retain a receipt and attach it?

  • EldonEldon Posts: 1Expensify Customer

    I have staff in Canada and the UK. Does this offering allow my Canadian and UK staff to carry the card?

    The daily settlement of charges. Can that happen against my bank in Canada.

    I think you need to be more clear to WHOM you are targeting this service. Just to Americans or worldwide?

  • JuliaJulia Expensify Aficionado Posts: 151Expensify Customer Expensify Aficionado

    Very interesting update, and excited to hear more.

    Curious as to how you plan to handle fraudulent transactions, would those be refunded to our bank account on a provisional basis while a more thorough investigation is being conducted? Since you're not on 'on the hook' for our purchases, who ultimately is in the case of fraud?

    What will your support model look like for the credit card? Generally, I am able to get most Expensify issues resolved with concierge (especially now that our account is well established and past our early growing pains). I don't think this support model would translate to a credit card, would there be a phone number to call and reach dedicated support? My cardholders are frequent travelers, and timely help and support is essential. Also, with this potentially being linked directly to our bank account, it is even more imperative to have dedicated support.

    Do you have any plans to change the timeline of the daily settlement? The real reason our company (and most, I would imagine) rely on the statement period is for a time buffer to allow employees to reasonably report their expenses, without having to drop everything else they're doing because it will impact our financial reporting. It is also imperative so that discrepancies can be found, addressed, and resolved. I'm a little wary of the accountability at play on whose stuck holding the bag when there is fraud or merchant disputes.

    Is there a certain threshold where you'd consider sharing the revenues generated from merchant fees as cashback to your customers? Or perhaps, free control policies? Sure, our business doesn't hinge on the 1.2% cashback we receive. But when you're talking about a large volume of spending, a $60,000+ check is nothing to sniff at.


    (I'm sure I'll think of more questions as I chew on this some more, but wanted to put these out there in the mean time)

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach
    edited October 8

    Hello everyone, thanks for the questions and comments.

    @jaeqoih7 and @Eldon@Elara_Rich -- The Expensify Card is not yet available outside of the US, but it is in our plans to launch it internationally! I've made a note of your interest in the Expensify Card and I'll update this thread as soon as I have a firmer timeline on the card's international release.

    @bthornhill -- I confirmed that we don't support custom logos or business names on the card right now. But it's a fantastic addition to the Idea category where we encourage customers to share and vote for feature requests!

    Regarding holds and pre-authorizations, here's how it works.

    • A hold is incurred for an expense and is added to the cardholder's Expensify account as a pending transaction. The settlement for that expense occurs the next business day, essentially blocking off those funds and paying the bill for the day.
    • The expense amount counts against the unapproved expense limit your company set for that cardholder. After the expense posts and is no longer pending, the UI is updated. If the charge posts for less than the hold amount, the difference will be credited via daily settlement.
    • The employee is then encouraged to submit the expense for approval. Once the expense is approved, that amount is available to the cardholder to spend on another purchase.

    @JohnD -- The communication was intended to go out to everyone using Expensify. If an employee level user is interested, they are not able to sign up for the card, but they can express their interest with their admins. That is the extent to which they can go. We've always maintained that the employee is a crucial part of making expense reporting a breeze, and we think of the employee as needing a voice for change as well.

    @alexg -- great question! If the expense incurred is under the limit for eReceipts, or for an expense that isn't supported by eReceipts (ex: Lodging), then the cardholder will receive a notification from the Expensify app asking them to upload a receipt for the expense. This is where SmartScan comes in handy because the receipt will be scanned and automatically attached to the Expensify Card expense.

    If the receipt is within the limits of eReceipts and your company has them enabled, the cardholder will receive a notification telling them that the eReceipt was generated and they don't need to upload a receipt. Admins have control over the use of eReceipts in the policy settings.

    I hope this information helps, sorry it took me a bit longer than I expected to get it off to you all!

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach

    @Julia - great set of questions, I'm working through them now and will update shortly.

  • Tom_WoodfordTom_Woodford Posts: 1Expensify Customer

    Please explain the eReceipts, as the owner of a construction company we need to see what was on the receipt itself, so if the guys don't take the photo will the new eReceipt include the line item details

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach

    Hi @Julia! So sorry for the delay, yesterday was a whirlwind day talking to so many excited customers about the card. I'm really glad to see you inquiring and knew that I'd get some great questions from you that would really benefit everyone in the community.

    Now, to dive in ...

    Handling fraudulent transactions, what's that look like and how does it work?

    First things first, if you think there is fraud on your Expensify Card, we encourage you to cancel it immediately. You can do this quickly by calling our Interactive Voice Recognition phone service (available 24/7) and confirming your registered details. If you can't access your phone, reach out to Concierge so they assist you in canceling the card.

    • US Phone: 1-877-751-5848
    • International Phone: +44 808 196 0632

    Next, please request a new card and report any disputed transactions through [email protected]. Once you've reported your disputed transactions, our operations team opens a dispute and begins their investigation.

    The funds will be temporarily credited to your bank account while we perform the investigation and a final determination is made.

    What will your support model look like for the credit card?

    Solid question, one I need a little more time to answer because I want to relay it properly. A super quick overview would be that we're starting with a dedicated team responding to questions regarding the card and handling disputes.

    You will still contact Concierge for support, but your inquiries will be send directly to the dedicated team.

    I'm following up with the team lead to really nail down the process and I'll fill you in once I'm confident of the whole picture.

    Do you have any plans to change the timeline of the daily settlement?

    In short, no. The future isn't set in stone and things may change, but not without real need and with feedback from our customers. We embrace innovation and a new way of thinking about expense best practices. Quoting David from above:

    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.

    We intend to test this idea thoroughly and if you're open to joining us, we'd love to have you.

    Is there a certain threshold where you'd consider sharing the revenues generated from merchant fees as cashback to your customers? Or perhaps, free control policies?

    Cashback and points, well I can't lie and say it's not on our radar, how could it not be with every other card offering something like that. But honestly, it's not on the roadmap and it's not something we're spending time talking about right now.

    Free control policies though, hmmmm? This isn't something I've heard any talk about, but it's worth floating around to see what bubbles up. If I hear anything interesting I'll let you know.

    For now, we've got some admin perks available you can see here. More is definitely coming on that front and we have some exciting things in the works that we can't wait to share.

    Cheers!

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach

    Hi @Tom_Woodford, I'm happy to share more about the eReceipts functionality.

    Right now eReceipts do not contain line item information, mostly because the merchant doesn't include that information. If there was a big industry change where merchants started including line-item detail frequently we'd definitely look into making a change there.

    For now, eReceipts look like the image below.

    Cheers!

  • coltonshaw06coltonshaw06 Expensify Newcomer Posts: 2Expensify Customer Expensify Newcomer
    edited October 9

    Good Afternoon, Can you speak to a bit of how this will work with an integration like Sage Intacct? Currently, we download transactions from the bank, pull into our GL and match with the bank downloaded sync. How would this be different?

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach

    Hi @coltonshaw06, happy to have you posting. Right now, the Expensify card transactions export just like other company card expenses export to our integrated accounting packages.

    For Intacct specifically, more information can be found here about how non-reimbursable expenses export.

    As David mentioned in his newsletter, we also have an automatic reconciliation feature in the works that will work seamlessly with every Expensify Card and integrated accounting package we support.

    Cheers!

  • Gemma_ArmitageGemma_Armitage Expensify Newcomer Posts: 2Expensify Customer Expensify Newcomer

    This sounds really helpful and would make life much easier for many of our staff. We would look to roll out to more staff than have credit cards now when it is available in the UK as it looks much easier to use and reconcile. We need this to be available in the UK!!

  • Sheena TrepanierSheena Trepanier Expensify Success Coach Posts: 1,992Expensify Success Coach - Admin Expensify Success Coach

    Hi @Gemma_Armitage, thanks for posting here! I have added your name to the tracking list for international support. Does your company have a US bank account by any chance? If you have a US bank account we can use for daily settlement, cards outside the US can be issued.

    Otherwise, we'll let you know as soon as it becomes available!

  • Gemma_ArmitageGemma_Armitage Expensify Newcomer Posts: 2Expensify Customer Expensify Newcomer

    Hi @Sheena Trepanier

    No, we are only active in England. Do you think we are looking months or years until it is expanded?

  • Sophie_ExpensifySophie_Expensify Expensify Success Coach Posts: 61Expensify Customer, Expensify Success Coach Expensify Success Coach

    @Gemma_Armitage unfortunately, we cannot give a definitive time-frame as there are a lot of moving pieces and we are still focussed on settling the Expensify Card in the US. We'd hope to have it internationally in the next year but keep your eyes peeled for a more committed time-frame 😊

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