The Power of Dynamic Authorization for Spend Management Platforms

6 Minute read
10 months ago

By Sammy Chan, VP & Head of Card Issuing, Nium

Spend Management platforms have emerged as indispensable tools for modern finance teams seeking enhanced control and visibility over their expenditures. An effective spend management solution makes it easier to deal with the high volume of administration and analysis that goes hand-in-hand with increased company spending — everything from procurement, purchasing, invoicing, vendor management, expense management, and real-time reporting.  

Gone are the days when such tools were only accessible to large corporations. The industry has undergone a transformative shift, with a projected compound annual growth rate (CAGR) of 11.1% from 2022 to 20291, fueling growth of many fast-growing companies. A wealth of data supports the tangible benefits these platforms provide, showcasing that companies leveraging spend management services typically save 6% to 12%2 overall, even after accounting for fees, becoming more efficient organizations.  

Central to the functionality of Spend Management platforms is modern card issuing. As a technology partner, we work with businesses to create and manage virtual and physical cards globally for travel expenses, employee benefits, and corporate spending. A unique difference we provide is the flexibility to set custom authorization logic.

Traditional card authorization methods often come with limitations that restrict the flexibility and granular control required for effective expense management, particularly for entities without a financial license.

That's where Dynamic Authorization comes in. As part of Nium’s modern card issuing product, Dynamic Authorization encompasses a suite of API-powered authorization models, offering unmatched flexibility and control, real-time visibility and reporting, and advanced fraud management capabilities.

  • Authorization rules and controls: We allow clients to set customized authorization rules and controls, such as spending limits, merchant categories, and geographic locations. These rules define when a transaction should be approved or declined. 

  • Real-time visibility and reporting: We provide real-time visibility into payment activities, transaction data, spending patterns, and analytics. This helps you make better financial decisions and manage expenses more efficiently. 

  • Fraud management capabilities: We incorporate advanced fraud management capabilities, including real-time monitoring, pattern analysis, and transaction verification. This helps detect and prevent fraudulent activities, safeguarding you from potential financial losses. 

Whether you're looking to enable effortless travel expense management while ensuring strict policy compliance through automated controls, offering recurring or one-time employee stipend cards with embedded policies for precise payment, designating spend limits for specific vendors or geographic locations with customizable recurrence or expiration to avoid overcharges, or blocking unwanted spending categories or merchants, we collaborate with you to meet your unique requirements. 

 

Select the Right Authorization Model That Aligns With Your Business Needs

Platforms can choose to leverage our full-stack authorization capability or customize authorization rules with granular control over individual card payments. 

  • Hosted model: Ideal for platforms seeking a simple and straightforward approach, the Hosted model has Nium act as the financial license holder and primary record holder and authorizing entity. By centralizing the financial authorization process, this model saves valuable time and effort for both platforms and their corporate customers. 

  • Delegated model: Tailored for financially licensed platforms, the Delegated model allows them to embed card spend capabilities into their core proposition, providing real-time data for rich insights and value-added services. Each card can be monitored and controlled, offering better auditability, security, and efficient fund management. Platforms retain the final say in transaction authorization. 

  • Extended model: The Extended model is a recent addition to our authorization product, catering to spend management platforms without licenses. Despite not having a license, these platforms can still participate in the authorization decision-making process based on custom spending rules. Nium manages the customer balance, while the platform becomes the final decision-maker, ensuring compliance and control over the authorization process.

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    As Spend Management platforms continue to revolutionize financial operations for businesses, Nium's card issuing and Dynamic Authorization stand as a powerful ally, elevating spending controls to new heights.  

    With its unparalleled flexibility in authorization logic, real-time monitoring, and advanced security checks, it takes a proactive approach in combating fraudulent activities. It efficiently empowers clients to reallocate valuable resources toward driving growth initiatives while maintaining compliance with industry regulations. Corporate customers gain confidence in their financial management and control, setting the stage for unprecedented growth opportunities. 

    To learn more, download our guide, Intelligent and Scalable Payments for Spend Management Platforms. To speak with a payments expert, contact us here.  

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    2. https://tradeshift.com/wp-content/uploads/2023/02/ArdentPartners-AP-MTM2023-Tradeshift-FINAL.pdf 

     

    About Sammy Chan
    Sammy Chan is an experienced vice president and product head for cards and issuing in the payments industry. With a strong educational foundation that includes an MBA in strategic management and international finance, Sammy brings a unique blend of expertise in computer science, software development, and financial strategy. Throughout his career at several financial payment technology (fintech) companies and leading U.S. Fortune 500 technology firms such as Visa and Microsoft, he has demonstrated exceptional leadership abilities and adeptness in cross-cultural communications. He has successfully managed diverse regional teams, showcasing his ability to foster collaboration and create an inclusive work environment.

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