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Want To Do Big Business? P-Cards Will Save You Money

Does your company aspire to sell goods and services to corporations or government agencies? Or perhaps it already does? If so, you may already accept or have been asked to accept something called purchasing cards (P-Cards). You may have thought to yourself, “What is the difference between a purchasing card and a corporate card.” So we thought we would clarify…

Purchasing Card: is used to purchase the types of items that would ordinarily be processed using a Departmental Purchase Order. The P-Card can’t typically be used for any travel or entertainment expenses. Processing rates for purchasing cards are also much lower than processing corporate cards. In order for a business to accept purchasing cards, they must have a special processing system (which I will explain more about later).

Corporate Card: is issued to employees for minor purchases, travel and entertainment-related expenses. Any business with a standard merchant processing account can process corporate cards (at a much higher rate than purchasing cards).

So, about that special processing system… Purchasing cards use a special type of processing sometimes referred to as Business-to-Business (B2B) payment card processing that differs from standard credit card processing because it is capable of something called “Level 3” qualification.

In a very general sense, the rate a business is charged when it processes the sale is typically affected by the “risk level” of the card swiped. Some cards and systems have different levels of risks for different reasons. I won’t go in to all that for the sake of simplicity. But here is a general idea of the different levels of transmitted data or processing risk.

As you can see, in level three the amount of information being collected and transmitted with the sale is significantly more than level one, resulting in a DRASTIC decrease in rates for the business processing the sale. For an even greater discount, businesses may encourage their customers, with tickets greater than $10k, to use Visa’s Advantage P-Card. You can see in the chart below, rates are reduced to as low as .40%.

Accepting P-cards are a great way for businesses looking to grow and deal with large entities to save money on high tickets. For more information on systems like 3-Delta, which allows businesses to process these cards, contact us.

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