Room for Improvement: Commercial Cards in 2017

January 3, 2017

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.

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.

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