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The emergence of virtual card payments: Data highlights changes in North American commercial payment practices
Journal of Payments Strategy & Systems,
10
(2),
194-204
(2016)
Abstract
To extend the use of card technology to highervalue transactions, card issuers now offer a range of ‘electronic accounts payable’ (EAP) products, often referred to as ‘virtual cards.’ In general, EAP is a non-plastic purchasing-card (p-card) account that is used to pay for goods and services after an invoice has been received. At that time, EAP card number information is transmitted or referenced for payment. The key feature of EAP is the dynamically adjustable line of credit supporting the account. Hence, the available credit on a card account is adjusted to match a specific transaction to be charged. After the transaction is completed, the available line of credit on the card is of little or no value. A wide variety of anecdotal commentary exists about the benefits of EAP, but facts about its use are limited. The purpose of this paper is to provide the reader with results from a recent survey about EAP use in North America. Specifically, the results show the types of EAP being used in North America, EAP spending norms, the benefits reported from EAP use, past and expected future growth of EAP spending, and the role of supplier acceptance to the success of EAP.
Keywords: commercial cards; virtual card; e-payables; North America; supplier acceptance; accounts payable
The full article is available to subscribers to the journal.
Author's Biography
Mahendra Gupta is a virgil professor of accounting and management at the Olin Business School at Washington University in St Louis. His research has been published in leading academic journals. He has served on several editorial boards and has been a frequent speaker at research workshops and conferences worldwide. Mahendra is also a consultant to various firms and government agencies and serves on various corporate and not-for-profit boards.
Richard J. Palmer is a professor of accounting and copper dome faculty research fellow at Southeast Missouri State University. Richard is a frequent speaker at commercial card conferences and the co-author of numerous articles about industry use of e-procurement tools and bank commercial cards. His insights on card use have been quoted in popular North American news outlets such as the Wall Street Journal, Good Morning America, CNN Money, and Market Watch.
James Brandt is a senior research analyst at RPMG Research Corporation. He received his BSBA in Accountancy and MBA with honors from Southeast Missouri State University. James has written articles and conducted research projects related to North American commercial card use with RPMG since 2011. Before RPMG, James spent three years in public accounting and one year teaching in higher education.
Nathan Palmer is a senior research analyst at RPMG Research Corporation. He received his BSBA and Masters in Accountancy at Southern Illinois University in Carbondale. Nathan has conducted research projects related to North American commercial card use with RPMG since 2012.
