Room for Improvement: Commercial Cards in 2017

Room for Improvement: Commercial Cards in 2017

Posted: January 3, 2017 | Updated: February 14, 2024

The year 2016 was not exactly a breakthrough period for commercial cards and other payment tools available to the competitive business-to-business sector. According to research recently published by the Professional Association for the Commercial Card and Payment Industry, B2B credit cards and virtual cards are gaining corporate acceptance, but they are not quite ready to completely replace checks.

The aforementioned year-to-date study was published in mid-December, and it shows that ¾ of business owners who have implemented purchasing cards in their companies are satisfied with using them. The respondents of the study feel that they do not have the same level of control as they used to with their commercial checking accounts that were tied to credit lines.

What is interesting about the current sentiment on commercial cards is that business users are not fully aware of how they work and everything they have to offer. Some purchasing managers who have previously used company credit cards for small expenses do not understand that P-cards are not necessarily credit accounts.

Purchasing cards can take many forms; for example, a virtual card can be assigned exclusively to a sole vendor for the sake of making B2B electronic payments. The terms and conditions do not have to change; in fact, some of them can be programmed to be executed automatically. If a business is used to floating invoices for 30 days, such a payment frequency can be scheduled.

commercial cards

Less than a third of company owners and managers using P-card solutions are interested in using SMS alerts or mobile payments. Not being familiar with the system and security concerns are the major reasons why business owners are not interested at this time.

Clearly, it is up to leaders in the payments industry to educate corporate America about the benefits of leaving their company checkbooks behind. Features such as electronic invoices and convenience checks that simulate old-fashioned payments could help in this regard.

What Are Commercial Cards?

Commercial cards refer to credit or debit cards that companies provide to their employees. These cards allow workers to make purchases on behalf of their employers. They are usually co-branded with retailers or fuel stations and restrict where the employee can use them.

Types of Commercial Cards

There are types of cards available, each designed to meet the diverse needs of businesses. Now let’s explore some variations:

Purchasing Cards (P Cards)

These cards are primarily used for making company purchases. They provide businesses with a way to manage their procurement processes.

Travel and Entertainment Cards (T&E Cards)

T&E cards are specifically intended for businesses with employees who frequently travel or entertain clients. These cards simplify expense tracking and management related to travel, accommodations, meals, and entertainment.

Corporate Cards

Corporate cards are typically issued to ranking executives within an organization. They offer flexibility and higher spending limits. Additionally, these cards come with benefits like access to concierge services, airport lounge entry, and other exclusive perks.

Fuel Cards

Tailored specifically for businesses that have fleets or frequently use vehicles, fuel cards allow for effortless monitoring of fuel-related expenses while also presenting discounts at gas stations.

Virtual Card Solutions

As the name implies, these cards do not exist physically. Virtual card solutions are an addition to the commercial card landscape and provide enhanced security by generating unique card numbers for each online transaction.

Benefits and Advantages Of Utilizing Commercial Cards

Benefits and Advantages Of Utilizing Commercial Cards

  • Using cards offers advantages to all types of businesses regardless of their size. One significant benefit is the ability to streamline expenses and effectively manage cash flow.
  • With a commercial card, employees can make company purchases without the need for reimbursement processes. Handling petty cash.
  • Commercial cards often come with reporting features that make it simple for business owners to track and analyze spending patterns. This can be valuable in identifying areas where costs can be reduced or optimized.
  • Another advantage is the increased security provided by these cards. They typically incorporate fraud protection measures, like real-time transaction monitoring and zero liability policies. This ensures that businesses are protected against charges and fraudulent activities.
  • Furthermore, commercial cards offer convenience by acting as a payment solution. Businesses no longer need to rely on payment methods or carry amounts of cash. Instead, they can opt for cards to cover expenses such as travel bookings, supplier payments, and office supplies.
  • Commercial cards often come with perks like reward programs or discounts from partner vendors. These incentives offer businesses the opportunity to save money or earn rewards based on their spending habits.

Tips for Selecting the Commercial Card for Your Business

When it comes to choosing a card for your business, there are several factors you should consider. Here are some tips to assist you in making the decision;

Evaluate your business needs: Start by assessing your company’s spending patterns and financial goals. Determine which features and benefits would be most valuable in streamlining your expenses.

Consider rewards programs: Many commercial cards offer rewards programs that can provide savings or perks such as cashback, airline miles, or discounts on office supplies. Look for a card with rewards that align with your business needs.

Review fees and interest rates: Carefully examine the fees associated with each card option, including fees, balance transfer fees, late payment penalties, etc. It is important to compare interest rates to ensure that you are obtaining a card with the lowest rates.

Look at the credit limit options and evaluate whether they align with your company’s requirements. Make sure they are neither excessive nor restrictive.

Look for services that may come bundled with commercial cards, such as expense management tools or travel insurance coverage. Determine if these offerings would be advantageous or not for your business operations.

Check the acceptance network of the card to ensure acceptance both domestically and internationally. This will allow you to use the card wherever necessary without any inconvenience.

Do proper research on the quality of customer support provided by card issuers. Look into their reputation for assistance as it can make a difference when dealing with any issues or inquiries related to the card.

Tips for Selecting the Commercial Card for Your Business

Conclusion

Commercial cards offer value to businesses of all sizes by providing convenience, control and enhanced security in expense management and simplified payment processes. By utilizing these cards, businesses can enjoy benefits like improved cash flow, simplified expense tracking, advanced reporting capabilities, and exclusive rewards programs.

It is crucial for businesses to carefully consider their needs and requirements when selecting a card. Factors such as credit limits, interest rates, rewards programs, and acceptance networks should all be taken into consideration. It is recommended to compare different merchant service providers and carefully evaluate the terms and conditions before making a choice.

In today’s business landscape, where efficiency holds importance, commercial cards provide a practical solution for seamless transaction management. Whether it solves the purpose of paying suppliers or vendors, keeping track of employee expenses, or implementing spending limits across departments – commercial cards offer flexibility and control.

To sum up, commercial cards go beyond a piece of plastic. They are powerful tools that help businesses stay organized financially while reaping the many benefits they have to offer.  If you’re searching for a way to handle your company’s finances while also enjoying these advantages, it might be worthwhile to consider incorporating cards into your business strategy today.

Share This Post

Save Time, Money, & Resources

Categories: Credit Cards, Purchasing cards

Get Started

Ready for the ultimate credit card processing experience? Fill out this form!

Contact HMS

Ready for the ultimate credit card processing experience? Ask us your questions here.