When you use a credit card or procurement card, you only see the merchant and your credit card issuers. Ever wondered who are the other parties involved?
Parties Involved in Transaction
- Card Holder – You (as a Purchaser) are the card holder
- Merchant – Vendor or retailer you are buying from (e.g. Walmart)
- Issuer – Your credit card or professional card issuing company (e.g. Citi Bank).
- Acquirer – Merchant’s bank that allow merchant to accept card (e.g. Wells Fargo)
- EPOS provider – Technology provider providing merchant’s capability of accepting card
- Bankcard association – Association that connect Issuer and Acquirer (e.g. Visa)
Step by Step Flow of P-Card Transactions
- Buyer Receives invoices from supplier
- Buyer Initiates payment to merchant
- Merchant charges the card and receives confirmation of payment.
- Buyer receives confirmation of payment.
- Merchant sends payment request for all card transaction to Acquirer.
- Acquirer forwards the request to bankcard association.
- Bankcard association sends the request to Issuer to settle the bill.
- Issuer settles the fund to Acquirer.
- Acquirer deposits the fund to Merchant bank account.
- Merchant receives the fund.
- Issuer updates the bank statement.
- Buyer pays the Issuer.
Credit Card vs P-Card
P-Card is known by many names: Procurement Card, ProCard, and Purchasing Card. P-Card are similar to credit card, but there are few differences.
- The primary difference is that P-Card is used by business users for corporate expenses whereas Credit Card is used by consumers for daily expenses.
- P-Card allows organizations to take advantage of existing credit card infrastructure to make electronic payments. Using P-Card, organizations can follow simplified procure to pay process for low value items.
- The payment for the P-Card is handled by organization whereas payment for the Credit Card is handled by the customer.
- P-Card bill is always paid in full whereas Credit Card bill can be paid over the period, payment of minimum due is enough.