While the overall spend that organizations put on their purchasing cards continues to grow every year, benchmark data shows that the growth is slowing. In addition, the percentage of organizations that have implemented p-card programs has remained essentially unchanged for the last two years.
However, this data is far from a sign that p-cards are on the way out. In fact, the opposite is true. P-cards are now a mainstay in a majority of accounts payable departments and the slowdown speaks more to the explosive growth seen during the past decade.
In 2010, RPMG Research Group released its bi-annual Purchasing Card Benchmark Survey Results. The report found that, between 2007 and 2009, average p-card spending increased by 17.6 percent. This is a slowdown when compared to the 24 percent growth seen between 2005 and 2007.
The report notes that the slowest growth is in large Fortune 500 companies, while mid-market corporations continue to see increasing growth rates.
These numbers could indicate that larger organizations, which are typically the first to implement new technologies, have mature p-card programs and have already migrated over most of their available spend. Meanwhile, smaller organizations still have room to grow.
Although spending growth is slowing, it is important to note that slow growth is still growth. Seventy-eight percent of respondents expect their card spending to increase between 2009 and 2012. With RPMG’s 2012 p-card survey currently underway, the results will reveal if those predictions were accurate.
The Accounts Payable Network’s own benchmark surveys also paint the picture that p-card use has matured. In 2009, 60 percent of participants indicated that they had implemented a card program, and in a 2011 survey, the percentage that use p-cards remained flat.
With the percentage of organizations making purchases with p-cards remaining flat, future growth will undoubtedly be in broadening the types of purchases paid for via card. The RPMG survey shows that organizations are putting higher-dollar purchases on their cards. In 2009, companies put 28 percent of their purchases between $2,500 and $10,000 on p-cards.
Another growth area is in buyer-initiated payment (BIP). BIP describes a variety of programs offered by banks that allow organizations to pay for invoiced goods over a card network without the need for a piece of plastic. RPMG refers to this as Electronic Accounts Payable (EAP).
RPMG’s 2010 survey states that 16.1 percent of organizations use EAP. This number agrees with recent similar TAPN results, which found that 17 percent use BIP. Because BIP/EAP allows buyers to take advantage of the benefits of a card program while maintaining the control of the traditional AP process, this payment method could become very popular as time goes on.
Organizations make more than $200 billion in purchases each year on p-cards. While spending growth has slowed compared to previous years, there is no indication that buyers are abandoning cards in favor of other payment methods. Since 2002, p-card use has increased by 103 percent. Card use has nowhere to go but up.