Electronic Data Systems Corp. has introduced processing and consulting services for banks that offer purchasing cards to corporations.
The electronic commerce division of the Plano, Tex.-based data processing giant hired Donald P. Kilpatrick, a 24-year veteran of First Chicago Corp., to direct the new purchasing card services within the EDS Card Processing Services unit.
Coming on the heels of purchasing card announcements by other organizations, the EDS move underscores the industry's fascination with, and growing commitment to, this emerging corporate service.
First Bank System of Minneapolis, the largest bank issuer of corporate purchasing cards, recently expanded its program, as did American Express and General Electric Capital Corp.
Transnet Inc., a rapidly growing operator of point of sale payment networks, last week introduced software to process purchasing card transactions. Card Establishment Services, National Data Corp., and Total System Services are among the other processing organizations that have similarly announced commitments to the market.
The reason for all the interest is clear: the $400 billion a year consultants estimate is spent by corporate employees for office supplies and other merchandise.
"It essentially comes down to opportunity," said Mr. Kilpatrick. "This is a virtually untapped market."
He added that EDS is currently talking to about six major banks about signing up for the new services, but that no contracts had yet been signed.
Mr. Kilpatrick, 57, was named an EDS vice president, reporting to Fred Gumbel, president of the electronic commerce division, who just one year ago came to EDS from First Bank System.
Mr. Kilpatrick will oversee EDS' commercial card services, including purchasing cards and corporate travel cards.
Mr. Kilpatrick is well-versed in the business. He recently led First Chicago's entry into purchasing cards. During his long career with that bank, he worked in many areas including systems, commercial banking, retail banking, and credit cards.
Another new EDS vice president, Guy P. Clifton 3d, will be national sales manager of the card processing unit, with responsibility for new business development.
Before joining EDS, the 46-year-old Mr. Clifton spent 12 years with Maitland, Fla.-based Credit Card Software, most recently as senior manager of sales. He also will report to Mr. Gumbel.
"Don and Guy's addition to our management team will bring immediate value to our initiatives in support of the credit card industry," said Mr. Gumbel.
"I believe EDS is uniquely qualified to fill a tremendous business opportunity," added Mr. Kilpatrick. "I would not be surprised if EDS got one million purchasing cards out there in the next couple years."
Mr. Kilpatrick said his group will pay close attention to three areas in which purchasing cards differ from consumer cards: authorization, billing, and reporting.
"Because of our global technological strengths, we can offer corporations the authorization standard they want, plus a flexible billing cycle and PC access to the reporting side," he said.
The EDS purchasing card service meets or exceeds all Visa and MasterCard processing and reporting standards.
More importantly, the company says, is the consulting support it offers prospective purchasing card issuers.
"We have an in-house consulting staff who can train our banking clients on how to sell purchasing card programs to corporations," said Mr. Gumbel. "We can also counsel corporations on how to reengineer their internal purchasing processes to optimize the impact of a purchasing card program on their bottom line."
The EDS electronic commerce division currently supports 14.8 million cardholder accounts, making it the third-largest independent account processor after First Data Corp. and Total System. It provides consumer and commercial card processing services to more than 300 organizations worldwide.