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Commercial Card History

Historical Insight on Commercial Cards

The following content originates from The One Card Solution, a 2016 NAPCP report.

The first Commercial Card payment system was implemented by a group of major airlines in 1937 and was primarily used as a central billing approach for air travel. It is centrally controlled and, from the traveler’s viewpoint, operates in a similar fashion to the Ghost Cards that would follow years later. In the 1970’s, two large firms launched their Corporate Card offerings, leveraging their established market recognition in the T&E industry with their consumer products.

Those first Corporate Cards found resistance from companies, as financial executives and others in senior management were afraid to put credit cards in the hands of traveling employees. The first real traction was developed when card-less accounts, known commonly as Ghost Cards, were introduced as a method of charging airline tickets to a central account without the apparent risk of employees spending freely on a card. This approach was promoted heavily by travel agencies, which had been carrying airline receivables on their books. The charge card companies began offering liability waivers to their corporate customers to mitigate the concern with inappropriate card usage and the distribution of Corporate Cards increased. The liability waivers, typically joint- and several-liability, evolved to the individual liability—individual pay option popular with Corporate Cards today.

In the mid- to late-80’s, bank card issuers began developing Corporate Card programs and then in the late 1980’s the first Procurement Card (P-Card) was introduced, after being developed for the U.S. Federal Government’s General Services Administration. The P-Card was directed to the purchase of general non-T&E items such as MRO and business supplies. P-Cards were introduced as, and continue to be, central liability/central pay payment vehicles, and this attribute of liability and billing remains the primary distinction between Commercial Card types. Since the introduction of P-Cards and particularly their wider market acceptance beginning in the mid-90’s, the issue of combining the two cards into a “One Card” solution has been a hot topic of discussion. This debate continues and, to a lesser degree, incorporates fleet expenses as well.  


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