Global spending on corporate, purchasing cards surges: Survey

DUBAI — Annual spending on corporate cards for travel and entertainment (T&E) expenses has increased worldwide for over 20 per cent from 2005 to 2006, according to a survey done by Aberdeen Group from February to March and commissioned by Visa and ACTE (Association of Corporate Travel Executives) Global.

By Jose N Franco Jr

Published: Sat 19 May 2007, 8:41 AM

Last updated: Sat 4 Apr 2015, 11:06 PM

Titled 'Global Commercial Payment Cards: Cutting Costs and Boosting Control on a Global Stage', the survey also said that spending on purchasing cards (P-cards) for office procurement has grown 25 per cent over the past four years.

Corporate cards are used primarily for T&E expenses while P-cards are used by companies for expenses related to maintenance, repair, operations and office supplies.

The survey, which involved 263 organisations in various industries in four major regions-Asia Pacific, Europe, Latin America and North America-said that cost-savings and increased financial control were the main reasons why companies implemented purchasing card progammes, whose goals and growth drivers differ by region. "Corporate and purchasing payment programmes have long been recognised by companies worldwide for their ability to effectively increase the bottom-line by improving overall processing efficiencies and improving cash flow management by providing enhanced visibility into expenditures," said Aliza Knox, senior vice-president, Visa Commercial, Visa International.

She added: "The global Aberdeen survey results identify growth in business spending worldwide and increased use of commercial payment card to better manage the increased spending." The survey said the average costs of a transaction made on a P-card is up to 75 per cent lower than in a traditional payment transaction, representing significant savings from thousands of transactions. P-card programmes aim to reduce administrative costs on transactions process.

Commenting on the survey, Kamran Siddiqi, general manager for Visa International CEMEA in the Middle East, said the Middle East is gradually realising the benefits of using corporate cards-as the practice in many other countries-to manage expenses and for procurement purposes. "The pace at which the region is developing is giving rise to increased commercial activity, Siddiqi said. "Business-related travel and procurement for oganisations is increasing and, in turn, creating the need to manage business expenditure efficiently and transparently."