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How P-Cards Work

The P-Card Process and Key Players

 

Purchasing Cards (P-Cards) or non-plastic account numbers are issued to employees (i.e., cardholders) responsible for making purchases or payments on behalf of their employer; for example, cardholders can order and pay for office supplies via a supplier’s website. Suppliers accept P-Cards for payment, utilizing the existing credit card infrastructure for payment processing. Transaction data is captured by a supplier’s point-of-sale (POS) system and transmitted through the card network. The level of transmitted data depends on the supplier’s process and technology systems; data levels include:
 

Date

Supplier

Transaction
Amount

Sales Tax

Customer-Defined
Code
Line-Item
Detail
Level I Standard

X

X

X

Level II Variable Data

X

X

X

X

X

Level III Detailed Data

X

X

X

X

X

X

*Members and complimentary subscribers, view more information about data levels. Not either one? Join today.
 
In addition to cardholders and suppliers, other parties are involved with the P-Card payment process:
 
Issuers work directly with end-users to implement and grow programs, issue cards and invoice posted P‑Card transactions. The issuer uses the services of the networks and processors to facilitate card issuance, authorize transactions and provide data. Many financial institutions are issuers. Issuers are sometimes referred to as card "providers."

 

Merchant acquirers enroll suppliers in the card acceptance process and implement equipment and software solutions related to this purpose. In addition, they facilitate payment flow, including payment to suppliers. A merchant acquirer is sometimes referred to as a supplier’s bank.

 

Networks facilitate the movement of transactional data between the issuer and merchant acquirer and set the rules pertaining to card acceptance by suppliers. Organizations in this role include Visa, MasterCard and American Express. (Note: American Express also assumes the roles of issuer and merchant acquirer.) Networks are sometimes referred to as "associations" (an outdated term) or the card brand.

 

Processors provide various services to card issuers and merchant acquirers, which may include card production, statement printing, authorization and data delivery.

 

Download the complimentary NAPCP Annual Provider Directory—a Purchasing Card professional's guide to leading industry product and service providers.

 

How P-Cards Work 

 

 

The card issuer typically provides a single electronic invoice to the end-user organization—at a minimum of once per month—reflecting all cardholders and their respective P-Card transaction totals plus a grand total. An organization does not carry a balance, instead paying its card issuer in full (at a minimum of one payment per month) for all cardholders’ transactions. The organization processes the invoice, creating accounting entries and facilitating payment to the card issuer.

 

 

With P‑Cards, the end-user organization assumes liability for payment—the cardholder neither owes the card issuer nor makes payments. However, cardholders are expected to follow their organization’s policies and procedures related to P-Card use, including reviewing and approving transactions according to a set schedule (at least once per month). The organization can implement a variety of controls for each P-Card; for example, a single-purchase dollar limit, a monthly limit, merchant category code (MCC) restrictions and so on. In addition, a cardholder’s
P-Card activity should be reviewed periodically by someone independent of the cardholder.

Become an NAPCP member or complimentary subscriber to gain greater access to educational resources; participate in polls and surveys; and receive P-Card news and event notifications.
 
 
 
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Featured Items
Event Calendar

12/10/2014
Virtual Webinar by Visa Europe: Aligning Commercial Cards with Procure-to-Pay Technologies

1/14/2015 » 1/15/2015
2015 NAPCP Canadian Commercial Card and Payment Conference - Toronto

4/13/2015 » 4/16/2015
2015 NAPCP 16th Annual Commercial Card and Payment Conference - San Antonio

4/13/2015
2015 Pre-Con Wkshp: P-Card Basics: Getting it Right the First Time—Starting from the Beginning

4/13/2015
2015 Pre-Con Wkshp: Taming the Travel Beast: Tips and Tricks for Managing Your Program



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Certified Purchasing Card Professional Credential 
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for the June 2015 testing period.


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