Frequently Asked Questions
What are purchasing cards?
What types of merchants accept the P-Card?
What are some ways Customers can use the P-Card?
What are some benefits of the P-Card?
Would Customers lose control over expenses with a card program?
What are the spending controls?
How do I get started?
How long does the implementation process take?
How many cards can I order?
How much do we need to spend before earning a rebate?
Can I put my logo on the cards?
I am concerned about fraud. Should I be?
What about employee misuse?
What are some of the most successful P-Card users doing to make their program a success?
What are purchasing cards?
A purchasing card is a company credit used to buy good and services directly, bypassing many of the steps in the traditional purchasing process. Purchasing cards (also known as procurement cards or P-Cards) allow for significant control and authorization of spending and are usually issued to employees or departments. Organizations develop policies and procedures specific to P-Card usage and reconciliation, often requiring cardholders to review and approve their transactions each month.
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What types of merchants accept the P-Card?
Any merchant who accepts credit cards also accepts the P-Card.
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What are some ways customers can use the P-Card?
Customers can use the P-Card for any purchase that they pay by cash, check, ACH or wire including bills, supplies or services that they currently purchase today as long as the vendor accepts the card. Some examples are as follows:
- community education
- food services
- supplies
- leases
- travel and expenses
- fuel
- telephone usage
- grants
- utilities
- technical equipment
- renovations
- sporting equipment
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What are some benefits of the P-Card?
Reduction in paperwork: requisitions, payment requests and petty cash and personal funds are is not needed when you use your purchasing card. P-Cards allow employees to deal directly with suppliers. The P-Card consolidates your monthly payments and saves time, stationery, checks, postage and filing. Another important advantage of working with our P-Card program is that we offer rebate incentives that are received by check, once a year, directly from the bank.
Vendors also benefit: Merchants who transform their paper-based procedures to electronic authorization and card acceptance will be paid in 24-48 hours. the reduction in billing and collection efforts should also result in lower overhead costs, increasing the margin of each transaction.
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Would Customers lose control over expenses with a card program?
No. Customers with successful purchasing card programs find they have more control with a card program that with the traditional procurement process.
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What are the spending controls?
The primary spending controls are limits on the amount of each individual purchase and on total dollars purchased during each single billing period. By blocking certain merchant classification categories, customers may also restrict the type of supplier from whom card holders make purchases.
Other controls may include, but not be limited to, limits on the number of purchases made per day and per billing period, and blocks transaction limits on specific providers.
Access to cash machines is automatically blocked.
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How do I get started?
We will forward you five (5) forms, including
- An application for your program (1 page)
- A contract to sign (called the Member Account Agreement)
- A resolution for your board to sign. This is a standard resolution. You may have one of your own already.
- An organization Set-Up form -a one page document that gives the Bank a snapshot of your program. We will walk you through this form.
- A simple Excel spreadsheet to order your initial cards.
After you receive these forms, we will be glad to explain each one, answering any question you have. We will ask you to send the completed forms, along with your organization's last three years of audited financials to us. This will enable the Bank to establish a revolving credit line for your program.
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How long does the implementation process take?
Typically, after a client submits the initial forms, cards arrive within 4-6 weeks.
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How many cards can I order?
As many as you like, whenever you like.
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How much do we need to spend before earning a rebate?
$50,000. Our rebate period runs from September to August each year.
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Can I put my logo in the cards?
Probably not. Because our program is free, we would need to pay to have your logo placed on the cards. However, each card has an "embossing line", which is an extra line for printing text below each cardholder's name. You can use that line to print your organization name on each card.
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I am concerned about fraud. Should I be?
No. There is no liability for your organization for fraudulent use due to a lost or stolen card.
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What about employee misuse?
First, we strongly encourage you to adopt the following Best Practices to reduce exposure to employee misuse:
- expressly state and document what the P-Card can and cannot be used for
- be sure to communicate these guidelines to new employees and new cardholders
- create an acknowledgement form for new employees/cardholders to sign that includes these guidelines as well as the consequences for breaching policy
- create spending profiles using the P-Card controls at your disposal: monthly limits, transaction limits, and merchant category blocking
Some Statistics: Check vs. ACH vs. P-Card misuse
In 2008, 71% of companies reported they were a victim of attempted or actual payment fraud.
- Of those companies, 91% reported that they were victims of attempted check fraud.
- By comparison, only 28% reported they were victims of attempted ACH debit fraud.
- 14% reported they were victims of attempted purchasing card fraud.
- Attempted check fraud at banks reached an estimated $12.2 Billion in 2006, with actual losses of $969 million.
- RPMG stats from a 2007 study: P-Card abuse accounted for 0.025% of purchasing card spend, equivalent to $250 of misuse for every $1 million of purchase card spending.
Additional coverage from Master Card is automatically provided
MasterCoverage is MasterCard's Corporate Liability Waiver Program. It provides coverage in the event of card misuse by employees. Under the program, your organization is covered for any waivable charges:
- Up to$100,000 per card, provided there are at least five cards in your program an each card is issued in an employee's name
- Up 50 $25,000 per card if your program has four cards or less, each issued in an employee's name
There is no fee for this coverage.
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What are some of the most successful P-Card users doing to make their program a success?
Clients achieving the maximum value in terms of time and rebate do
- Have support and buy-in from Senior Management, AP, and cardholders.
- Employ a cross functional team to decide policy and define procedures including members from AP, Finance, Procurement, Audit, and IT
- Include Accounts Payable right away - ordering cards for AP members as part of the pilot program
- Have preferred vendor list accessible to all employees
- Consolidate spend to a few suppliers
- Emphasize Training and Communication
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