A Mellon Bank Corp. survey of 600 large companies and government entities found that 47% had a purchasing card program and another 16% intended to implement one.
In the survey, conducted by Mellon's global cash management department in late 1997, 80% of respondents with such programs said they met or exceeded expectations, and 92% said they were satisfied or very satisfied with their current providers.
Among companies without purchasing card programs, 36% said they saw no need to change purchasing practices and 9% said they had been too busy to review the option. Seven percent said they were worried about control issues.
"The results of our survey clearly indicate that purchasing card programs are emerging as best-practice systems that save corporations money," said Robert W. Stasik, head of Mellon global cash management.
In another survey, of 2,000 purchasing managers, 10% said they used the Internet for more than half their purchases and 21% said they planned to do so by yearend. This survey was conducted on-line in February by Visa U.S.A. and Thomas Publishing Co., which sells business-to-business sales directories and operates Thomas Register, a print and Web site sales directory.
Among respondents who did not use the Internet for purchasing, 70% cited security concerns. The telephone was the most popular device for making purchases, followed by the fax.
Checks were the most popular payment method for business-to-business transactions. About 79% of respondents said they paid by check. Forty-one percent said they used credit cards, and 13% said they used purchasing cards.
"The findings from this survey indicate that payment trends are changing, with on-line purchasing becoming increasingly important," said Ryan Ross, vice president of commercial commerce for Visa. "As business-to- business volume grows on the Internet, so too will the use of purchase cards and the Secure Electronic Transaction protocol."
MasterCard International and First Chicago NBD Corp. have also conducted a survey of purchasing card attitudes, with results released this month. Among 220 First Chicago purchasing card customers polled in the fourth quarter of 1997, 64% said they would find value in having one card that combines the functions of purchasing, fleet, and travel and entertainment.
Fifty-seven percent of respondents called purchasing cards a key part of day-to-day operations, and 53% said they had restructured their purchasing departments as a result of purchasing card programs. Fifty-nine percent estimated their yearly purchasing transactions exceeded $1 million.
This month First Chicago introduced a commercial card that combines fleet, purchasing, and travel and entertainment functions.
The survey findings "confirm MasterCard's long-standing belief that companies can benefit from using one card to serve all of their business buying," said Steve Abrams, senior vice president, MasterCard U.S. corporate products.
He added, "As purchasing cards continue to play a larger role in today's business marketplace, companies are beginning to realize the need to modify accounting procedures to accommodate purchasing card technology."
