Change fees or cards could be obsolete, providers told

4 July 2001
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05 July 2001 | Robin Parker

Purchasing card providers will need to revise their fee structures as companies increasingly integrate payments into e-procurement systems, according to major card users.

The warning comes as a survey by card provider Barclaycard of its biggest clients found that nearly a quarter saw no long-term future for cards in either a plastic or "virtual" form.

Just over a third of the 70 respondents at its recent e-procurement forum, attended by public and private-sector organisations, thought both would still have a place in 10 years' time.

Jacky Jenkins, government purchasing card implementation manager at the Ministry of Defence, who attended the forum, said purchasing cards were the first stage of introducing e-procurement, particularly for low-value payments.

"People now accept their use, and the amount of spending is rapidly increasing," she said.

But she argued that companies such as Barclaycard needed to ensure that the large numbers of online purchasing card transactions did not lead to huge fees, particularly for suppliers.

"For purchases over £20,000, fees become an enormous burden. Providers need to look at revising the fee structure from percentage charges to single transaction fees," she told SM.

Barclaycard said fees would be examined, but insisted that purchasing cards had a future, with virtual cards gradually replacing plastic ones. "Virtual cards are a new area for many companies," said Simon Chick, the company's marketing director.

Nearly two-thirds of the Barclaycard respondents said e-procurement systems would give them more information about payments and better control.

"It is easier to build controls into the system and set limits ahead of card payments, rather than remind someone after the event that they have transgressed," Chick added.

SMjul2001

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