Visa Inc. will urge the Japanese government to use credit cards for all its purchases, from stationery to parts for fighter jets, saying it would save the country money.
The San Francisco payments company sees the current administration's efforts to slash wasteful public spending as a prime opportunity to promote a card-based settlement system for state purchases in Japan, Bruce Sullivan, Visa's head of government services, told The Nihon Keizai newspaper while visiting the country.
Sullivan said that under the envisioned system, each department at a government agency would be allowed to make purchases at its own discretion for outlays of up to $3,316. He said supervisors could review previous card transaction records to look for possible wasteful or inappropriate spending, and advise their colleagues accordingly.
Visa claims the card-based settlement system saves time and money by eliminating waiting periods needed for purchasing approval from senior officials and the time-consuming process of handling the various styles of invoices from different suppliers.
By streamlining these processes, Sullivan said, fewer people would be needed to handle purchasing activities. He said Washington saves about $1.5 billion including personnel costs annually by using a similar system.
Japan's current procurement system is complex and involves a lot of paperwork. Purchases must first be written up into a proposal and submitted to designated officials for review.
Once a purchase is approved, a supplier is chosen from among several prospective suppliers who submit their cost estimates.
Since the late 1990s in the U.S., 350 federal government organizations have been required to use the system for all purchases of up to $3,000.
In fiscal 2009, the U.S. government issued 3 million cards for that purpose.
Those cards were used for 100 million transactions worth $30 billion.
Sullivan said he plans to visit Japan three more times by yearend to promote the card-based procurement method.