Steve '
Project Director - Finance Director Europe (FDE) stevedunkerley@spgmedia.com
P-card uptake in Europe - how does it compare to the USA? CFOs / CPOs in Europe do you like them?
Last month I asked:
Why has the US been ahead of Europe in utilising p-cards - what are the challenges from a European CFO perspective ?
The reason I asked this question last month was because I was interested in what Vincent Eavis of Citi said in an article he wrote last year entitled "What Now What Next" where he illustrates the gulf between USA and Europe in terms of P-card uptake...."The largest Citi purchasing card client in Europe spends US$40m a year on p-cards, whereas a large US firm would spend that in a month"
One of the more interesting answers I got from this question was from Jack Large of J&W Associates, who argued:
"The big difference is that Europe is a major and well established user of Automated Clearing Houses unlike the USA. ACH transaction based charges are so much lower than the % based purchase card charges. I believe that p-cards will never have the same level of impact in Europe as in the USA."
Since then I have heard the contrasting argument that that ACH fees in the US are also dramatically lower than card fees. Additionally, the cards provide more value than just settlement so the comparison is not exactly an 'apple-to-apples' one. Also, the card fees in both regions are paid by the supplier (market theory tells us that these fees are ultimately borne by the buyer, but it's not perfectly applicable here from either a value or time standpoint).
Analysts, experts, card companies and p-card issuers from around the world - please feel free to wade in with your views on the state of play regarding p-card uptake in Europe. Stats and sources backing up your views are most welcome...
Finance Directors, CFOs and CPOs, based in Europe - please let me know whether p-cards part of your strategy - if so, why?.....if not, why?
I look forward to hearing from you...
Steve
Clarification added 5 months ago:
CFOs / CPOs in Europe do you like them? - I am referring to the cards not the officers...
Good Answers (2)
Have you seen any white papers on this subject? American Express has excellent statistics on this. I managed this process in the past for a company. We were able to launch a strategic process in the states but found implementing a p-card program in Europe problematic. First, the currency. At the time, there were no euro cards. Each p-card needed to be issued in local currency. Second, the acceptance rate in each country was dramatically lower than in the states. Third, the culture within the European subsidaries. They only wanted to use the p-cards for emergency purposes, whereas in the states, we broadly launched the p-cards for the replacement of items we normally would pay by check. We had a very strategic implementation within the U.S.
I hope this helps you.
I am happy to discuss futher. This is near and dear to me. A topic I am very passionate about and feel should be pursued much further to achieve real savings in the bottome line and from a productivity standpoint.
Delta Airlines has a fantastic success global success story regarding the p-card.
We at United Biscuits do use P-card facilities to a limited extent. Being an embedded SAP compliant organisation we prefer to use the requisitioning process through our series of preferred suppliers, self billing and our outsourced G&S provider. P-cards are used for dealings with small/local suppliers whose payment terms are outside our standard payment terms.
The differential between bank rates and card rates whilst an issue is not the prime reason for its limited use.
