Visa U.S.A. is expected to announce today that PNC Bank will offer a customizing system to companies with annual revenues of between $10 million and $250 million to encourage them to use Visa purchasing cards.
Only 7% of midsize companies use the credit card-like products designed for business procurement, according to research by the card association.
Such companies are a little hesitant because of the fear of loss of control, said Janet Zablock, the vice president of commercial solutions for San Francisco-based Visa. Small-business owners often keep their own books, and they fear that an unscrupulous employee could use a card for unauthorized purchases that would escape detection until it was too late, she said.
To respond to this fear, Visa is offering its bank customers Works Procisa Active Card Control, a system developed by the Austin, Tex., software company Works Inc. that allows businesses to place tight controls over their purchasing cards. Businesses can place a cap on the amount that can be spent on the cards, or they can disallow purchases from certain categories of merchants.
This would prevent a rogue employee from using the card to order a dozen frozen steaks from a mail-order butcher, for example.
The system also allows cards to be pre-authorized for a one-time purchase. For example, a travelling salesman whose computer crashed could receive authorization to buy a new computer, even if that merchant category was typically off-limits, PNC Bank said.
While the subsidiary of Pittsburghs PNC Financial Services Group Inc. is the only bank offering the Works Procisa system, two others are in the process of installing it, according to Visa.
Ralph Joy, senior vice president and manager of payables services at PNC Bank, says it will first offer the system to its more than 300 middle-market purchasing card customers.
With some customers, there are concerns about giving people credit cards, he said. If we dont have limits set, they will spend on everything. It is about control.
Mr. Joy said the new system could help PNC Bank reach the vast market of businesses that have forgone purchasing cards.
There are other of our customers who have been interested in the card, but have not implemented, because they have concerns about control, said Mr. Joy, who said he hopes the new Visa product will enhance spending or create new programs where we might not have been able to before.
