Overview of Card types
Business-to-Business (B2B) Payments
Primary Types of Commercial Cards
These cards are issued to/used by smaller organizations (as defined by the issuer) for all types of expenses, providing an alternative to a business owner and the employees using their personal cards for business expenses. As such, they are also known as “small business cards.” The business might have both credit cards and debit cards, or just one type. Unlike other types of Commercial Card programs, the issuer commonly allows the company to carry a balance on its credit cards versus having to pay in full in each month.
Corporate Travel Cards
As the oldest category of Commercial Cards, these cards are used to pay for business travel and entertainment (T&E) expenses. An organization can choose from among different types of program liability:
- Corporate liability (buying organization is liable for the transactions, like in a Purchasing Card program)
- Individual liability (employee/cardholder is liable, typically paying the issuer directly each month and receiving reimbursement from the employer for approved business T&E expenses)
- Joint and several liability (liability is shared between the organization and employee, giving the issuer the opportunity to pursue delinquent payments from one or both parties)
- Split liability (liability for specific transactions is assigned to either the cardholder or the organization, based on what the transaction is for; might use merchant category codes for assignment purposes)
- Contingent liability (ties in with individual liability; if the cardholder is delinquent, the issuer can pursue payment from the organization, providing the transactions are for legitimate business expenses)
A Central Travel Account (CTA) is associated with a specific card account number given to an organization’s travel management company (TMC) for the purpose of charging employee travel reservations and any related fees.
See also resources related to travel expense management.
Virtual Cards, described below on this page, offer another option for solving business travel issues and managing travel expenses. For example, a Virtual Card might be used for an employee’s airfare and lodging reservation.
Purchasing Cards (P-Cards)
Purchasing Cards are a type of Commercial Card used by organizations to pay for business-related goods and services. The end-user/buying organization must pay its issuer in full each month for the total of all P-Card transactions. Learn about the benefits to end-users and suppliers...
Cards are typically issued to specific employees (individual cards). However, the organization might issue a Ghost Card/Account to a specific supplier, who charges all of the organization’s purchases to the one account. Some organizations might also issue a Department Card to an internal department or business unit, whereby multiple employees within that unit charge goods and services to the card. With this type of card, strong controls are critical to ensure accountability for purchases. The issuer might restrict chargeback rights on cards not issued to a specific individual, so an organization should weigh the pros and cons before pursuing.
All three P-Cards specified in the graphic above function essentially the same way, with spend limits that refresh each month/cycle. The primary difference among them is who the card/account number is issued to.
One Card Programs
With this type of card program, an organization allows a mix of expense categories (typically T&E and goods/services) on one piece of plastic rather than issuing separate cards (e.g., a Corporate Travel Card and Purchasing Card) for the different categories. One Cards are also known as Multi Cards.
Electronic payables (ePayables) are an alternative type of Commercial Card payment solution, designed to capture the spend of goods and services that organizations do not typically push through the traditional P-Card channel. As with P-Cards, the end-user/buying organization must pay its issuer in full each month.
- With the push option (buyer-initiated payments/BIP), a supplier does not have to process a charge transaction. Instead, the supplier receives payment directly through its merchant account to its bank account. These payments are also known as straight-through payments.
- With the pull option (supplier-initiated payments/SIP), a supplier processes a charge transaction for the approved amount to a designated Virtual Card account number. These card accounts might also be referred to as Ghost Cards, but they differ from traditional Ghost Cards described above in the P-Card section because spend limits do not refresh each month/cycle.
Learn more about ePayables/Virtual Cards, including different types of Virtual Cards.