Global firms to ditch cheques for cards - Visa

Source: Visa

Today Visa (NYSE:V) released a global survey showing 74 percent of respondents are satisfied with their commercial payment card programs.

Currently, 50 percent of respondents currently use commercial payment cards to make payments as part of their overall cash management strategies. In the next 12 - 18 months, 52 percent of survey respondents intend to reduce reliance on checks and 45 percent plan to increase their use of commercial card programs.

Survey respondents rely on commercial payment cards to reduce processing and administrative costs (70 percent); eliminate paper-based invoicing (62 percent); facilitate receivables and payments (57 percent); and provide transaction data for better vendor pricing negotiation (46 percent). Companies also use commercial card programs to increase visibility into cash positions and improve forecasting.

"We are really pleased to see the level of satisfaction reported alongside the intention to increase use of commercial card programs," said Darren Parslow, head of Global Commercial Solutions for Visa Inc. "Commercial cards are a key part of an effective cash management strategy providing greater transparency, financial controls and robust information reporting tools."

Currently, in the United States, 58 percent of respondents use commercial payment cards with Canada close behind at 54 percent. Forty-six percent of respondents in Asia Pacific (AP) utilize commercial card programs, whereas 44 percent of their counterparts in Central and Eastern Europe, Middle East and Africa (CEMEA) and 38 percent and 30 percent respectively in Europe and Latin America and Caribbean (LAC) rely on cards. In all areas, companies expect to increase their usage of commercial payment cards in the next 12-18 months: Sixty percent of respondents plan to increase card usage in CEMEA, 48 percent in the U.S., 42 percent in Europe and LAC, 41 percent in Canada, and 38 percent in AP.

Importance of ERP Processes

In general, 65 percent of companies said that utilizing both e-procurement and ERP processes is important to their organizations. Forty-five percent cited cost reduction due to process streamlining as the primary reason for integration. In addition, companies believe that ERP integration enables:

  • Availability of transaction data for spend analysis
  • Use of card transaction data for better pricing negotiation
  • Enhanced compliance with commercial policies and procedures
  • Automated expense reporting reconciliation

Positive Impacts on Cash Flow Management Efficiency

Respondents identified cash positioning and forecasting as the least efficient step in their current cash management processes. The lack of streamlined operational processes and inadequate information and reporting capabilities were also cited as efficiency challenges. However, the majority of respondents said they have improved their overall cash management programs during the past year with 68 percent of companies identifying their cash flow programs as efficient. Overall, companies found that commercial card programs delivered efficiency gains that improved their cash management capabilities.

Other improvements from commercial card payment programs include:

  • Access to new levels of data
  • Visibility into cash position
  • Help forecasting future cash needs
  • Enabling the implementation of financial management software

Visa Global Cash Management Survey: Objective and Methodology

The Visa Global Cash Management Survey examined the use of commercial payment cards on a global basis. The survey was conducted by, a firm specializing in internet market research, and involved 800 financial, treasury and cash management executives from 11 countries across five geographic areas, including North America, Asia Pacific (AP), Central and Eastern Europe, Middle East and Africa (CEMEA), Europe, and Latin America and Caribbean (LAC). The majority of respondents in the U.S. worked for companies with more than US$500 million in sales per year. In other geographies, the majority of respondents were employed by companies with over 100 employees and annual sales of at least US$25 million annually.

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