Government adoption of Visa doubles in three years


The number of government departments and agencies worldwide that are using Visa solutions to increase efficiency and save money doubled between 2001 and 2004, generating at least US$4 billion in savings over the same period, according to new numbers announced today at the Visa International Government Services Conference.

Paul Boateng, Chief Secretary to the Treasury for the Government of the United Kingdom, in videotaped remarks to the Visa conference today, cited UK National Audit Office approved figures that indicate efficiency savings of £28 (US$50) for every transaction made using the Government Purchasing Card (GPC) program, as well as environmental savings of 1 million pieces of paper per month. "For the taxpayer this is obviously very important--it is all about making best use of the taxpayers' money and of course, we are all taxpayers," noted Secretary Boateng. "Our GPC program is absolutely fundamental in helping government move away from the traditional, paper-based method of procurement, which is not just about delivering financial savings, but supports the whole of the government's modernization and efficiency improvement agenda."

"Together with our global network of financial institutions, we are proud to have made Visa the leading provider of payment solutions to governments worldwide and to support such substantial public sector efficiency and savings," stated Aliza Knox, senior vice president for commercial solutions at Visa International. "With roughly 2,000 government departments and agencies using Visa procurement or travel solutions today, we see overwhelming evidence that governments around the world can use Visa solutions and best practices to reduce administrative time, improve management oversight, and support cost-saving measures."

Cost savings and efficiency results have now been documented in a number of studies. Efficiencies come from streamlined processes, automating labor-intensive procedures, improving employee compliance with spending policies and better management of government suppliers.

For instance, U.S. Government estimates presented at the conference indicate an average savings of US$54 per transaction, just in administrative costs, versus traditional paper-based processes at federal agencies.

One of the leading thinkers on government card programs, Professor Richard Palmer, presented data at the conference projecting a doubling of purchasing card spending in North America between 2002 and 2007, to a total of US$160 billion. Previously published findings by Palmer and his colleague Mahendra Gupta highlighted consistently impressive savings at the state and local level: purchasing card use by state governments generated average administrative savings of $8.3 million per year per state agency, public and private universities saved US$2.6 million per year per university, and city and country governments experienced an average savings of US$641,000 per year per card program.

Travel card programs can offer similar types of savings, particularly when integrated with electronic expense reporting. For instance, one major European employer has reported 15 percent reductions in hotel spending through implementation of a travel card program. Visa International's own integration of employees' travel cards with its corporate data systems cut administrative costs of processing expense claims in half from an average of US$52 to US$27 per claim and increased the compliance of expense claims with travel policies to nearly 100 percent.

An important trend being highlighted at the conference is innovative usage of Visa capabilities to improve efficiency and government responsiveness:

Steve Peck, President of SAP Public Services, Inc., presented how SAP and Visa International are working together to improve the efficiency of managing travel spending by using SAP NetWeaver to integrate transaction data in Visa Commercial Format with government financial management systems.

Brian Triplett of Visa U.S.A. updated participants on how Visa Commerce can help public and private enterprises attain new levels of control and payment processing efficiency for transactions of all sizes--particularly high-value, invoice-based purchases--while electronically providing valuable line-item transaction detail to buyers and suppliers for every transaction.

Craig Goellner of the State of Colorado Division of Child Support Enforcement demonstrated how the state is using a card program to expand electronic disbursements.

Attendees examined how public assistance, transportation subsidies, and health care access for students and pensioners in Moscow are being delivered by the Visa Moscow Social Card, which has grown to more than one million smart cards that also serve as an identity card.

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