GE Capital Adds a Purchasing Card to Its Corporate Line

GE Capital Consumer Financial Services has introduced a family of corporate expense management services centered on a new corporate card and a new purchasing card.

Both cards are MasterCard products issued through GE's industrial bank in Everest, Utah.

GE Capital, a wholly owned subsidiary of General Electric Co., is courting the estimated $300 billion to $400 billion corporate purchasing market with this new package of services.

The Cincinnati-based GE credit card company thus joins other well-known companies that made purchasing card announcements recently.

Earlier this month, for example, American Express announced several enhancements to its purchasing card product, including new software that the company claims will help corporations track spending more effectively.

American Express is also aggressively signing on industrial suppliers that traditionally do not accept credit cards as payment. Experts say that changing this payment philosophy is necessary if purchasing cards are to succeed.

And Card Establishment Services Inc., one of the top three providers of transaction services to retail merchants, has decided to accept purchasing cards from employees of corporate customers for items such as office supplies and equipment.

The GE Capital purchasing card program was developed in 1991 and used within General Electric since then. With this announcement, GE is extending the program to other corporations.

"Our target customers are Fortune 1,000 companies, since they have the scale to make a program like this effective," said Michael D. Schauer, vice president and general manager of GE Capital Consumer Financial Services. "We intend to be among the top two or three players in this market."

Several corporations have already signed up for the service, said Mr. Schauer, though he declined to name them. He said he expected a lot of interest and a handful of deals to be inked in the coming months.

The GE Capital purchasing card allows corporations to streamline purchasing transactions and lower costs by reducing back-office operations.

Accounting data are captured at the point of sale, fed immediately into an on-line reporting system, and sent directly into the customer's internal accounting system. This, says the company, allows businesses to simplify their purchasing process while providing spending controls and easy access to information.

"The key difference between our program and the other services out there is that our clients have the capability at any time to get the data they need at their desktop," said Mr. Schauer. "Our client-server network environment is a big differentiator, since many of our competitors provide information on floppy disk," causing a time lag.

The GE Capital corporate card is intended as a travel and expense card for employees of corporate customers. Businesses that issue the card to their employees will be able to combine card, travel agency, and expense management information on one data base for complete travel management.

Through the use of GE Capital's proprietary integration software, customers can monitor agency and card usage and police compliance to spur cost-reduction initiatives and more effectively negotiate with suppliers.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER