Purchasing Cards in Government and B2B

Billy Nurfaudzi, 120510180003

Purchasing Cards in Government and B2B

Purchasing cards or P-Cards are a type of commercial card that allows a company to utilize an existing credit card to make electronic payments for the purpose of spending business such as goods and services. P-Cards have a purpose and way of working that is very similar to a consumer credit card. The difference is that because this card is intended for a company or organization then the company or organization. users are required to pay a certain amount of fees to the card-issuing company in full each month. P-Cards are also known as Procurement Cards (ProCards), Payment Cards, or Purchase Cards. Purchase Cards also shorten payments to suppliers and reduce necessary administration such as requisitions, purchase orders, and invoices. According to the Central Government of the United StatesPurchase Cards also reduced the time needed in processing the administration from the original 6 weeks to only 2 weeks. With many advantages achieved, even long-time users of Purchase Cards, namely the United States Government who have used Purchase Cards for 15 years increase the use of the product. In order to spend the limits available by the U.S. government even eliminated some administrative flows to prioritize the use of purchase cards that are not in accordance with the budget but with the ease of this, this makes P-Cards very vulnerable to abuse such as an army that uses pentagon credits to buy cars and private motors and plastic surgery. Purchase Cards have three basic principles: standardization, centralization, and collaboration. Standardization, which was the most basic initial principle, had a strong influence in building the Purchase Cards infrastructure. One example that can be taken is the state department of the United States government. By combining domestic and overseas cards into a world-scale operation, the U.S. government can centralize management and operational needs. Centralization is also a basic principle that must go hand in hand with Standardization because decentralization becomes one of the pillars in managing the State Department, namely the global card program. Until two years ago, the operational management of the Purchase program was decentralized among three overseas regional centres making overall program management more complex. In 2001, the Department’s program operations management was consolidated and re-established in Washington. The third principle underlying Purchase Cards is the importance of collaboration, not only among member teams but also with other institutions, participating banks and credit card associations. The need to collaborate and work in partnership, including sharing best practices and winning learning strategies from other institutions cannot be overstated. Collaboration is critical to the long-term development and success of card programs. In addition to the U.S. government, purchasing cards are also used as corporate payment gateways. There has once been a study on the influence of developing Purchase Cards to promote its main B2B business located on Marketplace but as a result Due to the lack of the right solution for B2B transactions, there is currently no payment method that provides various financial functions. In these cases, international payment methods are required to integrate international logistics, document control, and payment methods. New payment methods that support international B2B transactions are required to have the function to easily pay for and securely accept the results of transactions. SCPS proposed by the study calls for a global purchasing card system for the e-Mar- global Marketplace to implement the idea of card purchases, which are already widely used in the market for international B2B transactions.

References

Gupta, M., & Palmer, R. J. (2008). A brief history and review of purchasing card use by the US government: 1990-2005. Journal of Public Procurement.

Kijin, J., & Keehong, K. (2011). A Study on the Development of the Global Trade Purchasing Card Gateway to Promote B2B e-Marketplace. Journal of Korea Trade7, 15(1), 71-90.

Colaianni, M. A. (2005). Principles and practices of managing a global purchase card program. Journal of Public Procurement.