Business

Company purchasing card (P-card) guide: Which ones are the best?

Mike Renaldi

13.01.23 (updated more than 1 year ago)

Read time 5 minutes

Businesses need a great deal of organization to keep on track financially. For instance, they need to both make purchases and then manage and track them all. A popular solution for businesses is to use financial business tools, such as a company purchasing card or purchasing cards to easily track and reconcile expenses.

This article will look at what a company purchasing card is, including what a p-card is and how solutions like the Wise Employee Expense Card might serve as a better option for your business.

Table of Contents 👇
What is a company purchasing card (p-card)? Purchasing Card vs. Credit Card vs. Debit Card: What are the pros and cons? American Express® Corporate Purchasing Card US Bank Purchasing Card JP Morgan Purchasing Card Mastercard Purchasing Card An Easier Solution: Wise Employee Expense Cards

What is a company purchasing card (p-card)?

A company or business purchasing card (also known as a p-card) is a type of commercial credit card that operates similarly to a consumer credit card. Employees can make electronic payments using the card and gain access to a line of credit. Like consumer credit cards, businesses using purchasing cards must pay the card balance off in full each month to avoid extra fees.

Other names for purchasing cards for business include procurement cards, payment cards, or purchase cards.¹

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Purchasing Card vs. Credit Card vs. Debit Card: What are the pros and cons?

Deciding between a purchasing card, credit card, or debit card will largely depend on the financial health of the business.

Financial considerations when looking at payment solutions should include current cash flow vs. debts, business growth, and future financial goals. Let’s look at each card type in more detail to understand which one is the right option for you.

The difference between a purchasing card and debit card

Understanding the difference between different card types is the first thing you want to tackle before getting a a new card.

The main difference comes down to give credit versus only allowing preloaded funds. A purchasing card can provide longer terms of credit for companies that may struggle in the short term to control cash flow. However, when payments are not made on time, they can come with hefty fees that lead to higher long-term costs and potential credit issues.

A business debit card, on the other hand, may be a better option for companies. Instead of an unlimited amount, companies can instead load money onto a card. In the end, managers can give their staff more autonomy on purchases with a prepaid total and maintain clear spending limits at the same time. Since a debit card doesn't provide credit, business owners don't need to worry about incurring interst on unpaid bills. This factor can give debit card customers more peace of mind.

Purchasing Card Pros and Cons

✅ Pros	❌Cons
Helps keep personal and business expense separate for easier reimbursement	Sharing the card among employees can cause issues with repayments
Can control business spending with limits and only have it used for approved vendors	Payments may not post immediately, making it hard to understand real-time spending and debt
Can get an overview on spending while allowing employees a quick way to pay	If balances are not paid in full, it could lead to interest fees and late charges
	Depending on the card, purchases may be limited to certain types of categories

Company Credit Card Pros and Cons

✅ Pros	❌ Cons
Tend to have higher credit limits, which can be useful for businesses looking to establish and maintain their credit	Potential misuse is high when credit limits are high, as transactions may not always be monitored
May have rewards or points-based system for rewarding spend	Personal guarantee is needed for business credit cards, and it may impact personal credit card history
Credit card processors are generally recognized all over the world, so payments will be accepted globally	Late payments and uncleared balances are subject to interest fees and late charges – which could impact your credit score

Business Debit Card Pros and Cons

✅ Pros	❌Cons
Limits on spending since money is coming directly out of a business account, so less opportunity to accrue debt	For businesses looking to take out credit or loans in the future, debit cards are not a tool for building credit
Debit cards don’t have any annual fees associated with them, so they are cost-effective	Keeping track of your PIN and other details may be difficult if multiple employees are using the card (You can always purchase more cards)
Debit cards are typically easier to obtain, especially for new businesses	Balancing accounts can be stressful, especially as the balance cannot always be monitored in real-time

Company purchasing card programs

Many large financial institutions have business purchasing cards that are available to businesses looking to streamline finances. There are many options available for purchasing card programs for businesses, including the following:

American Express® Corporate Purchasing Card

✅ Pros² ³	❌ Cons
Online account access available on desktop and via mobile app	Credit will vary depending on annual business income, so may not be suitable for newer businesses
No annual fees associated with the AmEx Purchasing Card	American Express is not always accepted with vendors
Reconciliation and expense tracking tools available to help businesses speed up reimbursements and monitor transactions	2.5% foreign transaction fees for payments outside the United States

US Bank Purchasing Card

✅ Pros⁴ ⁵	❌ Cons
Card management tools including mobile payments, account access via desktop and mobile app	Might need time to initially set it up and identify right controls for spending and transactions
Cap transaction number and amount spent for greater control, including single purchase amount	Requires time to manage purchases, keep track of transactions and apply additional spending limits as needed
Can be integrated with other financial systems	Limited financial reporting tools

JP Morgan Purchasing Card

✅ Pros⁶	❌ Cons
Enhanced spending control available on broad level as well as on individual account level	Can only be used for specific purchases, such as procurement for operations, but may not be suitable for other types of payments
A wide array of account management tools to monitor and track spending that can be used as standalone or integrated with other financial systems	May still take time to reconcile and track expenses, especially establishing levels of control
Contactless, mobile payments, and virtual purchasing card options available	Cannot be used as a company card, so may not be suitable for all employees

Mastercard Purchasing Card

✅ Pros⁷	❌ Cons
Value-add services to replace cards and additional benefits such as car insurance, trip planning and trip assistance services	Does not integrate with other financial systems
Spend control tools to manage spending and increase efficiency for making payments, including faster payment processing	Does not have additional tools for expense tracking, financial reporting or expense reconciliation
Additional security tools such as authorization controls for transactions and unique account numbers to ensure account safety	While Mastercard Purchasing Card does have travel benefits, its main use is for procurement so no rewards/value for travel or other spending

An Easier Solution: Wise Employee Expense Cards

With Wise Employee Expense Cards, businesses can bring together various types of transactions under one account and allow employees to make payments on the go.

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Wise is known for transparency, and so you’ll be able to tap into the competitive prices of the mid-market rate immediately.

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Are you single-member LLC or sole trader? Pay one-off fee for your business card today.

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Learn More:

The Best Prepaid Debit Cards For Small Business: A Detailed Guide

5 Steps for Calculating Travel Expenses: Business Tips

Sources:

What are Purchasing Cards? - NAPCP

American Express® Corporate Purchasing Card

American Express® Corporate Purchasing Card Benefit Terms | American Express Global Corporate Payments

Purchasing Card | Corporate payment services | U.S. Bank

Corporate payment solutions management tools | U.S. Bank

Purchasing Cards: J.P. Morgan P-Card & Procurement Program

Mastercard Purchasing Card | Corporate Procurement Card

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