The Purchase Card

The P-Card, AKA the Purchase Card is the next generation of invoice management. In this article I am going to highlight the benefits of business credit card acceptance from the customer’s perspective. Benefits which, in turn, roll over to the Merchant. I have often heard the terms Business/Corporate and Purchase card used interchangeably as if they are one in the same. They are not. The Corporate Credit Card is issued by a company to the individual for expense purposes such as travel and entertainment and client relations. The Corporate Credit Card can also be used to purchase materials or supplies, but that is not its most efficient use. In fact, the Corporate Card has more in common with a regular Consumer Credit Card than anything else.

The Purchase Card cannot be accepted with a normal credit card terminal. Businesses that accept P-Cards must have access to a Payment Gateway. (see previous articles for a description of the payment gateway). The credit card terminal does not have the technology capable of capturing Level 3 Data. What is Level 3 Data? It sounds confusing but here’s how it works. When a P-Card is administered as payment, the purchase must consist of supplies, materials, or inventory for the running of that business. A Purchase Card CANNOT be used for travel and entertainment. The business that supplies the P-card can set the parameters for what supplies may be purchased on the card. At the point of sale, the merchant must request information from the purchaser such as invoice or customer number, or any other relevant information regarding that purchase. The merchant in turn must enter the sales tax, quantity being purchased, date that the goods will be shipped etc. This information is called Level 3 Data. Once the transaction is complete, the card issuing bank generates an invoice containing the Level 3 Data that was entered at the time of sale. The invoice is than sent to the company that purchased the goods alleviating the need for a complex invoicing system.

Both the federal and state governments are converting to the Purchase Card system due to its efficiency and cost saving benefits. Manufacturers and suppliers use it for its ease of use regarding accounting and inventory management. Is the Purchase Card a fit for your business??


Todd Rome
Director, BankCard Services
Southern Lending Solutions, LLC