Purchase cards are the most widely used e-payment with an 84% adoption rate
Accepting commercial credit cards like Corporate, Business, Purchasing (P-cards) and GSA purchasing cards are an important component of a company’s payment policies. Commercial credit cards are being used to replace inefficient and expensive paper purchase order processes by businesses, corporations and government agencies of all sizes.
It is estimated that by 2012 the total amount of purchasing card spending in North American will reach $218 billion. And according to a Q1 2012 eInvoicing Adoption Benchmarking Report by PayStream Advisors, Purchase cards are the most widely used e-payment with an 84% adoption rate with another 16% of organizations surveyed planning on implementing P-cards within the next 6 months.
Think your business is too small to land a lucrative government contract? Think again. Almost a quarter of all federal prime contracts and 40 percent of all subcontracts go to small businesses. Consider that more than 350 federal entities participate in GSA's SmartPay program— using purchasing cards (p-cards) to make purchases of goods and services needed for their operations, spending more than $30 billion on over 100 million transactions in fiscal year 2011. P-cards allow them to make purchases more quickly and more conveniently than previously used methods of purchasing. Because of these benefits, more agencies are attempting to shift purchasing to vendors that accept cards. And card use by federal entities is expected to continue growing as they identify additional ways of using cards and implement new payment technologies.
Corporations and businesses are also aggressively adopting purchasing, corporate and business credit cards to reduce administrative expenses and identify opportunities for savings. A survey of almost 1,300 purchase card program administrators from corporations, nonprofits, and government entities found a $53 administrative cost savings per transaction compared to purchase orders.
For merchants, the benefits of accepting P-cards as payments include improving profitability by reducing payment time from 30-60 days to 2-3 days, reducing collection expenses and reducing the cost of floating funds until payments are received. Accepting purchase cards with a processing technology that can pass Level 3 data (line item invoice detail) will increase your competitiveness in winning new contracts and may even be a requirement of your buyers. Qualifying for Level 3 Interchange rates will reduce processing expensive over traditional retail and MOTO merchant processing.
Contact us for a Level 3 Interchange quote detailing Visa, MasterCard and Discover commercial card rates, qualification requirements and next best rates.