Comerica Inc. will be the first bank to use Electronic Data Systems Corp. as its procurement card processor.
Plano, Tex.-based EDS has been developing the new processing software for the past six months and said it would be fully operational next month.
Comerica will test its procurement card product internally in May, with a national rollout scheduled during the summer. The company has not released the details of the program.
Although the $33 billion-asset bank outsources its consumer card processing with First Data Corp., the No. 1 credit card processor, third- place EDS won the contract because of its "experience in business cards, which is very advantageous to us," said Frank Borovsky, Comerica's vice president of corporate banking marketing.
The Detroit-based bank has a strong treasury management service, and executives see the procurement card as an extension of those services, said Colleen Entenman, procurement card product manager.
"Given the interest of our current customers, we feel it will be a very significant product for us," she said.
Comerica, the 12th-largest business lender in the United States, and No. 1 in Michigan, has a number of Fortune 500 company clients, including most of the automotive industry companies.
"We picked EDS because its experience with data processing is known and trusted by our customers, and we are very impressed" with their product, said Ms. Entenman.
Don Kilpatrick, manager of commercial card projects at EDS, said the company is "developing a partnership which gives Comerica a chance to offer the best corporate card products that will meet or exceed phase one and two of Visa and MasterCard rules."
He was referring to the associations' certification process to issue the cards. Comerica has not decided whether the program will be affiliated with MasterCard or Visa.
Fred Gumbel, president of EDS' Electronic Commerce Division, worked with Visa in 1993 helping to write the original requirements for procurement cards when he was at First Bank System.
"He's probably one of the most knowledgeable guys in the country" in regard to purchasing cards, said Richard Robida, senior executive vice president, Speer & Associates, an Atlanta-based consulting firm.
Although the requirements aren't set to go into effect until next year, Mr. Robida said EDS is "way ahead" of its competition.
"EDS doesn't always show up on people's radar screens when thinking of a processor - you think First Data and Total System - but when you start to peel the onion skin back, EDS has come up with some really good products, and this is one of them," Mr. Robida added.
Founded in 1962 by Ross Perot, EDS jumped into the card processing business in 1989 when it purchased Westlake, Ohio-based BancSystems Association Inc.
EDS, now owned by General Motors Corp., processes the GM MasterCard portfolio for Household International.
Procurement cards give corporations a tool to purchase goods and services from retailers without having to go through the purchasing department.
The programs are designed to save corporations money by reducing the paperwork and labor time associated with purchases.
"It's a huge market out there that the banks are now searching out, with $400 billion in terms of annual expenditures," said Mr. Kilpatrick.
The EDS program offers flexible reporting structure to 23 levels of the corporate hierarchy - more than any corporation would require, said Mr. Robida.
Transaction data is accessible via personal computers, enabling purchasing managers to feed information into general ledger or accounts- payable systems. Multinational companies can access the data anywhere in the world, the company said.
Earlier this year, EDS included the procurement card processing service as a part of its commercial card offering to banks.
