P-Card Hype and How to Avoid it

September 25, 2014 Kim Pendergrass

This past weekend we attended the ASBO International Conference and Expo. School business officials from around the world descended on Kissimmee, Florida to learn about innovations affecting the business of running a school district. From finance to HR and nutrition to transportation, every topic on the spectrum was covered. What surprised me the most however, was the finance department’s enamorment with the 'p-card'.

The original intention behind p-cards was great—plastic in the hand of a trusted company representative for a point of sale purchase. And if you play your cards right, you'll get a cash rebate.

employee making a purchase with a p-card

P-cards are not great, however, for vendor payments. Let’s be clear: P-cards should NEVER be your payment tool of choice for paying vendors. Why? Because there are better payment products out there that will a) net you a bigger return, b) better reduce your risks of fraud, c) give you tighter accounting controls, and d) and dramatically decrease your reconciliation time.

So why are all these sharp business officials letting their school districts use dated and more risky payment tools?

I wasn’t really sure so I asked around on the exhibit hall floor. Here is what I learned:

  1. P-cards generate rebates
  2. We are cutting edge so we use a P-card

Huh? So to sum up my exploratory conversations, P-cards generate rebates and tell others that you are an innovation wizard. Yikes…..

Here is the truth about P-cards:

  1. They generate rebates – And so do nearly every other card payment tool
  2. They were cutting edge in the late 1980′s, maybe when they were first developed

But more importantly, P-cards:

  • Often use the same card number each time = increased fraud risk
  • Are not accepted by every vendor = not helping your automation/paperless efforts
  • Require a messy reconciliation effort on the customer’s end if the vendor does not process the transaction timely
  • Can come with a good rate but not the continuous vendor enablement effort to ensure that your vendors will even take the card as an invoice payment
  • Programs require constant supervision and oversight
  • Require the end-user organization assume liability for payment

Never fear, there's a better way

The ghost card, the virtual card, the AP card, or whatever else you want to call it is a true AP payment tool.

  • Virtual single-use card number
  • Controllable to the dollar amount
  • Rebates paid with the first dollar spent depending on issuer... read the fine print.
  • Can be turned on and off in an instant
  • Opportunity for easy reconciliation

Pair this payment type with a complete epayment solution and your AP department will become dangerous, in a good way. Don’t believe the hype of the p-card. All businesses, even school districts, can get a better return (with security and control) by moving to the p-card’s cool cousin, the AP card. AP cards with continuous vendor enablement services will deliver the rebates and efficiencies that p-cards can’t touch.

About the Author

Kim Pendergrass

Kim is the Director of Product Marketing at Nvoicepay. She has over 7 years of strategic marketing experience in the B2B payments space.

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