2006 State of Texas Credit Card User s Conference

2006 State of Texas Credit Card User’s Conference Eliminating Travel / Cash Advances Using Corporate Travel Cards Presented By: Laura Miles, Vice President November 1 -3, 2006

Session Objectives § Provide an overview of the available travel card products, controls and features § Identify benefits of using the travel card to manage travel advances § Discuss Case Studies of how agencies have structured their travel advance programs using travel cards § Allow entities to ask questions and gain a better understanding of this approach © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 2

Session Agenda § Introductions § Overview of Card Features & Controls § STMP Travel Card Options § Benefits of a Travel Card Program § Case Studies: Sample Travel Scenarios § How to get Started § Discussion, Question & Answer © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 3

2006 State of Texas Credit Card User’s Conference Card Features & Controls

Card Features Overview Billing Options: Liability Options: § Individual Bill § Cardholder Liability § Central Bill § Corporate Liability · One individual billing statement for each card account issued · Consolidated billing statement – regardless of the number of card accounts issued · Cardholder responsible and liable for payment · Agency/State responsible and liable for payment © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 5

Card Issuance Options Individual Card: Department Card: § An Individual Card is issued in an individual person’s name § A Department Card is · Maximize dispute and fraud rights · Eliminate possible merchant acceptance issues · Entity must request card as travel requests are made issued in an entity’s name or a Dept name · Department cards forfeit many dispute and ALL fraud rights · Potential increase in merchant acceptance issues · Account can be linked to the traveler name in software · May allow entity to keep a pre-issued “inventory” of travel cards in stock © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 6

Standard Controls Available § Monthly Dollar Limits · Maximum $ amount can be charged within a billing cycle · Example: $5, 000 per card/month § Single Transaction Limits · Maximum $ amount can be charged in one single transaction · Example: $1, 000 Single Transaction Limit § Merchant Category Code (MCC) Controls · Limits which merchants the card can be used at · Example: Card can only be used with Airlines § Smart Data On-Line (SDOL) reporting available for all accounts © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 7

Merchant Category Codes Overview § MCC = 4 digit # associated with a Merchant (4012) § Assigned to the merchant by the merchant’s Bank § Designed to identify the merchant’s business type (i. e. . plumbing) § MCC’s are NOT a perfect world! · Common reason for card declines § MCC one-time overrides can be requested of Customer Service by Program Administrators § STMP has created travel MCC group defaults: · TX Travel, TX Air, TX Hotel, TX Air etc. § Entities with State funding must use MCC defaults assigned by TBPC § Higher Ed. Entities with Local and other non-State funds can deviate from MCC groups and can also create custom MCC groups (see RMs) © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 8

Advanced Card Controls Available § Declining Balance Card Controls · Allows you to set a $ limit value for the life of the card vs. per billing cycle · Example: $5, 000 per card § Restricted Authorization Dates · Allows you to set a specific timeframe as to when the card can be used · Example: Trip dates of January 1, 2006 – January 7, 2006 § Single Transaction Controls by (MCC) · Enables you to have different single transaction limits for different types of purchases · Example: Restaurants = $50 © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 9

2006 State of Texas Credit Card User’s Conference STMP Travel Card Options

JPMC Travel Card Products Available § Individually Billed Account “IBA” § Individual Bill / Cardholder Liability · · · · Issued in the name of an individual traveler Intended for travelers who meet STMP issuance criteria Billing statement goes to traveler address (home/office) Traveler is liable for all charges Applicant must pass a JPMC personal credit screen Monthly limit is based upon credit review Standard MCC Profile used: ― TX TRAVEL (Air, Car, Hotel, Restaurants, Gas) ― TX EXCLUDE (High risk merchants excluded) ― TX $200 (Retail limited) © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 11

JPMC Travel Card Products Available § Centrally Billed Account “CBA” § Central Bill / Corporate Liability · · · · · Issued in the name of an individual traveler OR a Dept name Multiple cards/accounts can be issued under one CBA Consolidated billing statement sent to one address, as desired “Memo” Statements are available for each card, if desired Entity is liable for all charges NO JPMC credit screen required Monthly limit is based upon amount requested If a Dept Card is issued, utilize stringent card controls to mitigate fraud Standard MCC Profiles used: ― TX Travel, TX Exclude, TX $200 ― TX Air, TX Hotel, T X Car © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 12

JPMC Travel Card Products Available § Corporate Liability – Individually Billed Account “CLIBA” § Individual Bill / Corporate Liability · · · · Issued in the name of an individual traveler OR a Dept name Individual cards issued Individual billing statements sent per card, to address desired Entity is liable for all charges NO JPMC credit screen required Monthly card limit is based upon amount requested MCC Profiles used: ― TX Travel, TX Exclude, TX $200 ― TX Air, TX Hotel, TX Car ― Custom MCC groups, as appropriate © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 13

2006 State of Texas Credit Card User’s Conference Benefits of A Travel Card

Benefits of using a Travel Card vs. Issuing a Travel Advance § Travel cards can be used to replace employee travel advances, student and group travel advances and athletic team travel advances · · Reduce the administrative tasks associated with issuing advances Eliminate multiple checks cut for this purpose – pay one statement Streamline reconciliation of travel advance bank account Reduce tasks associated with RUSH or Same Day advance requests § Hold your funds longer – Increase your float · Eliminate having to advance funds before they are to be used · Pay only actual expenses with additional “float” provided by use of card © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 15

Benefits of using a Travel Card vs. Travel Advance § Card offers more control over how funds are used · Use of Merchant Category Codes can control where funds are spent § Card offers more visibility and insight into travel activity · When using travel advances and employee reimbursements, payments are often reflected under the employee vs. vendors used – you lose detail · Gain a clearer picture of vendors being used with card reporting · Strengthen the State of Texas ability to negotiate vendor volume discounts with Airlines, Hotels, Car Rentals, Others § Card offers more protection against loss than cash © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 16

2006 State of Texas Credit Card User’s Conference Case Studies: Sample Travel Scenarios

Travel Card Program Scenario #1 § Central Bill Account “CBA” § Central Bill / Corporate Liability § Program Summary · Objective: Reduce travel advances for athletic team travel · 3 accounts issued in Dept. names ― Athletic Dept Accounts: Basketball, Football, Track · Used for Athletic Team travel needs, mostly air, meals, hotels · Only Air, Restaurant & Hotel MCC’s are open · CBA used with Travel Agency for airfare © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 18

Travel Card Program Scenario #2 § Corporate Liability – Individual Billed Account “CLIBA” § Individual Bill / Corporate Liability § Program Summary · Objective: Provide card for high $ frequent travelers – OR - travelers who did not qualify for IBA/credit scoring · Accounts issued in Traveler names · Utilize CLIBA Card Use Agreement (due to Corporate Liability) · TX Air & TX Car (cannot direct bill other MCCs) · Traveler must have pre-approval to travel · CLIBA used with Travel Agency · Program Administrators closely monitor card activity via SDOL © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 19

Travel Card Program Scenario #3 § Corporate Liability – Individual Billed Account “CLIBA” § Individual Bill / Corporate Liability § Program Summary · Objective: Use card to replace cash advances for Student Group Travel · Several accounts issued in names of escorting professors · Uses expanded MCC controls as allowed by higher education and credit limit controls · Custom MCC Groups · Cards issued “Just in Time” in advance of group departure dates · Single-use card with some exceptions for those that travel repeatedly · Program Administrators monitor card activity via SDOL © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 20

Scenario #3 - Workflow Request for CLIBA card n The department and professor must complete the CLIBA application and a University credit card acknowledgement which discusses use of the card. CLIBA Card Issued to Traveler n Professor is issued a CLIBA card instead of a check. Travel Complete n Card is closed at the conclusion of the trip. n Professor uses the card for all student group travel expenses once the trip begins. n The department determines the budget and this becomes the credit limit on the card. Billing n JPMC issues a billing statement for each individual CLIBA card. n Statements sent directly to department/ professor Reconciliation Payment n Department reconciles by matching receipts to the JPMC billing statement. n Department processes payment for CLIBA bill through University's Office of Accounting. Travel Section n Payment sent to JPMC for CLIBA account billing. © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 21

Scenario #3 – Things to be Aware of… § MCC Controls for International Travel · Many international merchants code themselves in such a way that does not allow for the card to be accepted, given the controls on the card ― Example: Hotel in France coded themselves as a general contractor · In the beginning, University processed one-time overrides to overcome this issue · University has expanded the MCC profile for CLIBA cards to accommodate international travel § Some cash may still be required · To overcome MCC issue · To accommodate purchases with vendors that do not accept cards § State contracted airfares cannot be used for group travel § Pre-trip expenses are not placed on these accounts © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 22

Travel Card Program Scenario #4 § Central Billed Account “CBA” for Travel Advances § Central Bill / Corporate Liability § To be used with your Travel Advance Fund § Program Summary · · · Objective: used for employees who request travel cash advances Inventory of Dept Cards issued in Agency’s name 100% of travel cash advance request issued to card TX Travel, TX Exclude (high risk MCCs closed), TX $200 Retail MCC’s are open Traveler must have pre-approval to travel Can use declining balance (set a $ limit value for the life of the card) and restricted date (set a specific timeframe as to when the card can be used) features · Single-Use card issued for each travel advance and card closed after use · Program Administrators link card to traveler name in SDOL via custom name field © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 23

Scenario #4 - Workflow Travel Advance Request n Traveler submits advance request at least 5 days before travel n Agency approves for 100% of anticipated travel amount Travel Complete “TRAVEL” Card Issued to Traveler “TRAVEL” Card n Agency calls JPMC to assign declining balance limit, restriction dates and set the cardholder’s SSN for activation n Agency updates account in SDOL with traveler name , traveler SSN and budget information Reconciliation n Agency reconciles “TRAVEL” card balance against employee’s travel advance account. n Traveler returns ‘TRAVEL” card n Agency processes a travel advance voucher to the travel advance fund n Agency runs final summary report from SDOL to document “TRAVEL” card expenditures. n Traveler activates “TRAVEL” card using last 4 of SSN n Traveler uses card for all business-related travel expenses Payment n Traveler submits a travel voucher documenting travel expenses n Agency calls JPMC to close card n Traveler issued a “TRAVEL” card instead of a check equal to 100% of anticipated travel expenses n Agency either processes a reimbursement to employee or in rare cases, employee writes a check to the agency n Agency runs consolidated report of all ‘TRAVEL” card charges for the billing period from SDOL. Ideally, report is already coded. n Receive consolidated statement and reconcile to “TRAVEL” cards issued n Single payment to JPMC for all “TRAVEL” card expenditures from travel advance account. © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 24

Scenario #4 – Things to be Aware of… § Hotels (and gas stations) will require a pre-authorization that is higher than the anticipated amount of your actual stay § The pre-authorization and the actual charge will utilize the credit limit and could cause declines for other trip related purchases · The traveler has a one-night reservation at the Holiday Inn at the $80 a night rate · The traveler checks into the hotel and the hotel pre-authorizes the card for $120 · $120 = $80 rate + $40 miscellaneous charges (telephone/long distance, breakfast, etc. ) · There is a $120 “pre-authorization” on the card that is posted against the credit limit · The traveler checks out the next morning and is charged for the $80 rate (no tax) · The pre-authorization will drop off the card within 2 -3 business days § Traveler education and awareness is critical! © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 25

2006 State of Texas Credit Card User’s Conference How To Get Started

How To Get Started § Call Your designated JPMC Relationship Manager (or TBPC for help) · Share your existing scenario, program goals, discuss objectives · Talk through card options, pro’s and con’s of different product approaches § Thoroughly Understand Map out the Process · · Current state vs. Future state Understand policies, traveler needs, pitfalls, areas of opportunity Map out the process from start to finish; identify workflow, areas impacted Obtain all necessary internal approvals for implementation § Create Implementation Project Plan with your RM · Necessary JPMC forms, applications etc. · Identify cross functional team contacts and training needed · Be aware of controls and audit impact · Create Pilot Plan, and work out any kinks or issues; Refine plan · ROLLOUT! © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 27

2006 State of Texas Credit Card User’s Conference Travel Contacts

JPMC Contacts 1. “Program Coordinators” Customer Service Team 1. Nicole Sirianni 2. Melissa Johnson 3. (888) 508 -9758 for Program Administrators Only 2. Field-based Relationship Managers 1. Laura Miles – State Agencies & Universities 2. Toinette Miller - State Agencies & Universities 3. Audrey Flood – Co-ops © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 29

JPMC Travel Contacts Laura Miles Relationship Manager (Agencies & Universities) JPMorgan Chase laura. s. miles@jpmchase. com (972) 529 -9455 Toinette Miller Relationship Manager (Agencies & Universities) JPMorgan Chase toinette. a. miller@jpmchase. com (972) 377 -8132 Audrey Flood Relationship Manager (Co-ops) JPMorgan Chase audrey. e. flood@jpmchase. com (512) 246 -9204 © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 30

TBPC Travel Contact Melissa Hernandez Program Specialist, State Travel Management Program Texas Building & Procurement Commission melissa. hernandez@tbpc. state. tx. us (512) 463 -3254 TBPC State Travel Management Program http: //www. tbpc. state. tx. us/travel/index. html © 2005 JPMorgan Chase and Co. All rights reserved. JPMorgan Chase Bank, N. A. Member FDIC. 31

2006 State of Texas Credit Card User’s Conference Open Discussion, Question & Answer