What are p-cards?

What are p-cards?

P-cards are also known as purchasing cards or procurement cards. They are a type of charge card that can be used by businesses to simplify the payments processes while also cutting some of the transaction costs that can be associated with traditional purchase-to-approval systems.

P-cards are not credit cards and do not give you access to a line of credit. Instead, purchases must be paid in full either at the end of the month or immediately by being subtracted from your account balance.

Traditional approval systems require employees to submit request forms. Those forms must then be processed before they are approved. A purchase order will then be issued, and the supplier will submit an invoice. Finally, a check will be issued to pay for the item.

This process is costly and will result in the same transaction costs even if an item being purchased is small. The National Association of Payment Card Professionals reports that the transaction costs of the traditional approach can range from $50 to $200 per transaction. In many cases, the costs involved in the process can exceed the value of the item that is purchased. When a company adopts p-cards, it can save up to 80 percent of the transaction costs.

Purchasing cards have become increasingly popular because of their ability to cut costs and to control expenses. More businesses are finding them to be useful tools to use in their payment systems. Purchasing cards have been growing at a compound annual growth rate of 9 percent and are certain to continue because of the benefits that they offer.

P-card definition

P-card definition

The definition of p-card refers to a type of payment card for businesses that companies can give to their employees to use so that they can purchase low-value items that are needed for the day-to-day operation of the businesses. By understanding the definition of p-card, you might gain more insight into how these cards might be beneficial for your company.

What is a procurement card, and how does it work?

A procurement card is another name for a p-card, and the terms are used interchangeably. Procurement cards allow employees to procure the services and goods that their companies need without having to submit requests and to go through the traditional process.

When an employee uses his or her p card, the purchase is subtracted from the business’s deposit account or from the card balance that has been allocated by the employer. Interest is not charged since the employees are spending the business’s money instead of funds from a line of credit.

Why p-cards are used by businesses

A company might choose to implement a p-card program for a variety of reasons. The cards can help to cut transaction costs and to save time when businesses need to purchase everyday items for their companies.

A p-card can also help businesses to track their expenses more easily because many of these types of cards come with built-in expense control features. Businesses can set controls on the cards before they give them to their employees that help to prevent unauthorized purchases.

How p-cards can help to prevent unauthorized purchases

The built-in expense controls of procurement cards can help businesses to prevent unauthorized purchases. Businesses can restrict the cards so that they can’t be used to purchase items from disallowed purchase categories or from merchants that are not on the business’s preferred list.

The cards can also be turned off during the employees’ non-working hours. Finally, business owners can set daily spending limits on each card that help to keep the employees within the business’s budget.



P-cards are company charge cards that let businesses avoid the costly traditional systems that are involved in the procure-to-pay process. Instead of having to go through the process for every purchase, employees can use the cards that are given to them to make purchases that you have authorized.

When employees use p-cards, the purchases are subtracted from the amount of money that you have made available on each card. Information about the transaction can be electronically transmitted to your accounting software so that you can see the purchases in real time.

Businesses of all sizes use p-cards because of their ease of use and the expense controls that they offer. The cards are also good because they allow companies to end other payment systems such as petty cash, reimbursements, and checks.

Using a p-card can solve the problem of a lack of internal controls. According to the Association of Certified Fraud Examiners, nearly half of the fraud incidents that occurred happened because of a lack of strong internal controls. P-cards allow you to assign limits, restrict the cards to approved vendors, and have access to transparent spending data whenever you want.

Procurement cards

Procurement cards are the same thing as p-cards. They are also known as purchasing cards. These cards can be used to purchase needed goods and services that companies need to continue operating efficiently.

Purchasing cards are not limited to plastic cards that you physically distribute to your employees. They can also include virtual procurement cards, which are randomly generated 16-digit card numbers and CVV codes that can be used to make remote purchases securely online and over the phone.

The randomly generated numbers represent the business’s associated account but cannot be traced back to the account or to the company. When charges are made, they are routed through to the account and subtracted from the balance. Virtual purchasing cards can be set to expire once they are used or to be used by an employee over a short duration of time.

The benefits of virtual p-cards include substantial protection from fraud. If hackers manage to steal the numbers, they can’t use them to steal the company’s information or funds. You can learn more about procurement cards and virtual cards by reading our in-depth articles below.

Payment cards and payment services

Payment cards and payment services

A virtual payment card is a set of randomly generated card numbers together with a CVV code that can be used to pay for services or products online or over the phone. When virtual payment cards are generated with a virtual card service, they can be activated and ready to use within minutes.

Businesses can generate virtual payment cards by requesting them through their card issuers. They can limit the cards to the specific price of the product that is being purchased and to the vendor who is offering it. Once the purchase is completed, the numbers expire and are useless.

Virtual payment cards can help to save businesses time and money. They will not work if a thief steals them because they expire as soon as they have been used. Businesses also will not have to go through the traditional procure-to-pay process and can simply generate a number to make a needed purchase.

Purchasing cards

There are several benefits and disadvantages of a purchasing card. The benefits include the following:

  • Improved internal controls
  • More information about budgets, expenses, and fraud or misuse
  • Convenience for employees and employers
  • Greater efficiency in completing transactions

P-card disadvantages might come into play when businesses want to use them to purchase larger items. Some suppliers will not accept purchasing cards for the payment of larger items because of interchange fees that might be charged. Businesses that grow large might also find that a different solution such as a ghost card might help them to track the expenses more easily than distributing p-cards to individual employees.

Virtual accounts

Virtual accounts

Virtual accounts are a collection of dummy accounts that are able to make payments and to receive payments for a single physical account. Corporates are able to use virtual accounts to reconcile the payments that have been made in real time.

A company can use a virtual account management platform to create, monitor, and manage these types of accounts and to generate virtual account numbers. When payments are made from one of the account numbers, the purchase is routed through to the physical account and subtracted from the balance. The payments are traceable back to each individual dummy account. You can learn more about virtual accounts by reading our in-depth article below.

P-card policies

Before rolling out a p-card program, it is important for businesses to have strong p-card policies in place. Your p-card policies should include detailed information about how employees can use their cards and the types of purchases that are authorized or not allowed.

Having a p-card policy is a good idea because it can help your employees to understand the rules for the cards and the types of purchases that they cannot make with them. A policy can help to improve expense management and can be baked into the cards with the expense management software.

For example, a company that owns a fleet of vehicles might issue fleet cards to the drivers. The policy for the cards might authorize gasoline purchases and vehicular repairs while disallowing purchases of restaurant meals or other items. To learn more about p-card policies, read the in-depth article below by visiting the link.

P-card training

In addition to a good p-card policy, p-card training is also crucial. When your employees are trained on how to use their cards and about your policy, they are less likely to make errors with the cards. This can help to reduce your business spending.

Employees and businesses can benefit from p-card training. Employees will understand your expectations and be able to avoid making mistakes. You can benefit from the cost savings and fraud prevention. P-card training programs are available online, making it simple for your employees to learn how the cards work without having to travel.

P-card vs. credit cards

P-card vs. credit cards

P-cards vs business credit cards work differently. P-cards are charge cards that do not allow businesses to carry over balances from month to month. P-cards also do not incur interest charges. Credit cards allow businesses to carry over balances and may charge interest.

P-cards vs business debit cards show similarities. Some business debit cards offer the same robust expense management features that come with p-cards. However, purchases are debited from the accounts immediately rather than being repaid once per month.

P-cards vs. ghost cards also have some differences. While p-cards are given to individual employees, ghost cards are virtual numbers that can be assigned to individual departments or to high-volume suppliers.

The employees in a department can all charge purchases to the ghost number, and the purchases are charged back to the department. Suppliers can charge the assigned number so that they do not have to invoice large volumes of low-value products. You can read more in-depth comparisons in the articles below.

Procurement cards pros and cons

There are a few pros and cons of p-cards. While there are both disadvantages and advantages of p-cards, the advantages outweigh the disadvantages. Here are some of the benefits and drawbacks of p-cards.

The benefits of p-cards include the following:

  • Convenience
  • Lower processing costs
  • Better controls
  • More information about spending
  • Better ability to identify misuse and fraud

The drawbacks of p-cards include the following:

  • Large companies might benefit more from ghost cards
  • Some suppliers and vendors might not accept p-cards

Business fraud

Business fraud

Business fraud is an issue for a majority of businesses and must be closely guarded against with strong fraud prevention measures. A procurement card can help to reduce the risk of fraud by giving businesses greater control over the expenses and increase the transparency of the spending.

Businesses are able to identify card misuse and business fraud quickly because the transactions can be reconciled in real time. Business owners can see the spending that is occurring from their dashboards. Since the cards allow businesses to incorporate their policies into the controls on the cards, unauthorized spending can be prevented. Employees also will not be able to use the cards to make cash withdrawals at ATMs.

The fraud prevention features of p-cards make them much less risky than other payment alternatives such as business credit cards, cash, reimbursements, and checks. The controls combined with the transparency can help to stop fraud in its tracks.

P-card API

P-card API

An API or application programming interface is a set of protocols or rules that instruct different parts of an application about how to communicate with each other. A p-card API is a set of protocols that can be integrated by a developer into a company’s existing applications. A p-card API can work with any programming language and is universal.

Using a card API can allow businesses to generate p-cards from within their applications. The cards can then be ready to use within minutes to make purchases. An API can also allow businesses to integrate the cards so that the information is automatically transmitted, helping to automate processes and to create custom workflows. For more details, read our API documentation below.

Why businesses might want to consider using p-cards

Why businesses might want to consider using p-cards

There are several reasons why businesses might want to consider using p-cards. They are robust tools that can make expense management much easier for companies. The p-card solutions from Bento for Business are great options for companies because of the cutting-edge expense management software and tools for businesses.

The cards can be restricted by location, purchase category, merchant, time, and amount. Businesses can set customized spending limits by the day or week on the cards. They can see the transactions that each employee has completed from their dashboards and can turn off individual cards by tapping or clicking a button on their smartphone screens. The cards have been recognized as a good solution for businesses by leading publications such as Forbes. Businesses can try the cards for free for 60 days. To learn more, call 866.220.8455 to speak to a customer service professional.