Anders: There is one basic issue that has not been addressed in any of the emails in this string: cost!
I agree with the P-card strengths outlined in some of the other emails, e.g. added level of control, fast settlement for the seller, ubiquity, etc. I believe P-cards are a relatively efficient mechanism for settling both e-commerce and traditional commerce....with one caveat. That is, as long as the value of the purchase stays below, say, $1,200. P-cards charge the user a percentage of the purchase value as a fee. For smaller corporate purchases they make some sense. Above this level the economics break down very quickly. This limits the overall usage and ultimately the value of P-cards as a business-to-business settlement mechanism. This is one of reasons why corporate America continues to write over 25 billion paper checks each year to settle B-to-B commerce (this and other issues relating, for example, to the adoption issues around fEDI and other electronic settlement options--but that's another story.) What commerce needs is a settlement mechanism that supports B-to-B settlement with: -Quick and efficient settlement: Banks, the subject of another email in this string, maintain an effective inter-bank clearing network, i.e. ACH and other country-specific networks, that is actually very efficient at moving money between bank accounts at different banks. Until there is a better solution, banks will continue to play a valuable intermediary role in the world's ability to move money. Commercial settlement solutions should leverage this strength. The real issue here is that the ACH network, albeit effective at moving dollars, is ineffective at moving the data associated with those dollars (see next point). -Rich remittance information: One of the least efficient and costliest activities involved in B-to-B settlement is the time and resources it takes to generate payments on the buyer side and, even more so, post and reconcile payments on the seller side. Buyers and sellers both benefit significantly when remittance information and addenda records move with the payments through the system. The largest value-add for either participant would be the ability to include as much descriptive remittance as is required for more efficient back-office payment processing. Furthermore, the need to keep the "dollars and data" together from end-to-end is critical. Once separated, as happens with a fEDI transaction that flows into a bank for back-end ACH settlement, remittance information requires manual processing or re-keying. When bits turn into atoms and back again, errors inevitably occur. All you have to do is ask your nearest Account Receivable Manager or Controller about the remittance and reconciliation limits of ACH, fEDI, P-Cards and paper checks. -Integration with existing A/P and A/R systems: The sheer number of various ERP systems currently installed within enterprises, and the systems-related investment constraints of mid-sized and small businesses, seem to leave only paper checks as the only ubiquitous payment solution. However, given the remittance, security/fraud and settlement timing issues associated with checks, buyers and sellers need an electronic payment solution that is acceptable and usable by companies of all sizes. Therefore, the ability of any payment and settlement application to integrate into these systems and software, without necessitating changes to those systems, makes remittance flow and reconciliation even more efficient. A buyer should be able to generate their regular pay run within their existing A/P system environment and process, include addenda in the proscribed format of that system and disburse it electronically to all of its vendors regardless of vendor size, systems capabilities or preferred remittance format. Likewise, a seller should be able to receive remittance in their A/R system's proscribed format for electronic uploading and posting, from any of its business customers regardless of size, systems capabilities, etc. -Security: Digital signatures using strong PKI encryption, buyer- and seller-side system access controls and secure Internet transmission are all available technologies to solve the critical authentication, theft and fraud protection issues. These should be table-stakes in today's commercial environment. -Standard pricing for transactions of any value: Again, P-Cards are a reasonable solution for low value purchases. However, a payment solution that doesn't price discriminate between a $100 purchase of office supplies or a $100,000 purchase of a backhoe seems to be the better answer. Will a solution such as this ultimately replace the payment and settlement mechanisms relied on today by the commercial world? Perhaps. Change will occur slowly at first. Will there be a time when tradition settlement mechanisms and the artifacts that enable them, e.g. P-cards, are a thing of the past? I believe so. David A. Goldberg [EMAIL PROTECTED] Clareon Corporation -----Original Message----- From: Anders Rundgren [mailto:[EMAIL PROTECTED]] Sent: Tuesday, October 02, 2001 1:45 AM To: Geoff Browne; [EMAIL PROTECTED] Cc: [EMAIL PROTECTED] Subject: Re: The end of P-Cards? Geoff, >Seems to me that everyone's missing the point..... Not really, just a definition kind of problem. >The value of a PCard is two-fold: >* it enables the Buyer to establish controls over who buys what for how much >from whom (and reducing maverick spend is a key benefit of eprocurement for >both buyer and supplier) I Agree >* it ensures the Supplier receives guaranteed payment (less PCard fee) >within 2 - 4 days of purchase, compared with 60 - 120 days in mainstream >circumstances. I Agree >With eprocurement systems capable of being configured with a virtual Pcard >number according to user setup configuration (and I agree that there needs >to be tight security around this), limits are placed on misuse / maverick >spend. This is exactly what my original posting was about. If it is a virtual Pcard or a 3D Secure virtual Visa card seem irrelevant assuming that it is the eprocurement system that do the checking (rather than the seller doing a register lookup). Anders ---------------------------------------------------------------- To subscribe or unsubscribe from this elist use the subscription manager: <http://lists.oasis-open.org/ob/adm.pl>
