Card Program Buy-In

Risk perception goes a long way. Fear of fraud and card misuse can prevent a card program from reaching its potential. Management might restrict card distribution, spend limits and merchant category codes (MCCs) to make them feel more protected, but fraud and misuse can still happen. We can never eliminate all risk associated with any payment method. Meanwhile, your organization loses out on maximizing card benefits, such as process savings and rebate. What can you do? After all, executive management support is critical to developing a strong program.

Understand Influential Factors

Many factors influence people’s perceptions about Commercial Card programs: previous experiences, lack of knowledge, media reports, and resistance to/fear of change. To combat misperceptions, the best approach is to avoid emotional arguments and stick to the facts. However, per a related Recharged Education blog post about misperceptions, facts do not always sway people and providing more information does not always yield better results. 

To garner support of the card program, start by understanding the factors that influence perceptions and then tailor your communications accordingly. 

To garner support of the card program, start by understanding the factors that influence perceptions and then tailor your communications accordingly. 

Select the Right Facts 

Obtaining buy-in might require being savvy about which facts will drive the desired outcome. What is your management most interested in or concerned about? Your business case should be tailored to them. Typically, it is beneficial to include a balance of: 1) key industry statistics, such as fraud data and average process savings, and 2) specific metrics about your card program.

What is the cost of fear? The two columns below offer examples with quantified data that can help dispel vague fears.

Putting a “Scary” Scenario into Perspective

Let’s say your P-Card program has $25M in annual spend. What if a cardholder made $50,000 worth of personal purchases? This is a large number, yet it equates to only 0.2% of the annual spend. (The same is true of a $10,000 fraud in a $5M program.)

If the average P-Card transaction size is $450 and the average process savings per transaction is $50, which is considerably lower than the industry average, your $25M program generates $2.78M in annual savings. If your average rebate is 90 basis points, that is $225,000. Plus, card programs include protections, such as liability waiver insurance, whereby your organization may not suffer any financial loss from this type of fraud.

Showing How Restrictions Reduce Rewards

If your management prefers conservative spend limits, such as $1,500, to reduce the potential for fraud, show them what they are missing.

  • What percentage of your organization’s annual payments fall between $1,501 and, say, $4,999 and are currently processed by AP due to the card limit?
  • How many transactions is this? Multiply the number of transactions by your process savings per P-Card transaction to identify your opportunity. (Learn how to calculate process costs and savings.)
  • What is the dollar total of these transactions? Calculate what the potential rebate would be, further strengthening your case. Learn more about maximizing rebate...

Adopt an Ongoing Strategy

Developing a business case to garner support implies a one-and-done tactic, but, to retain momentum, you need to regularly do a variety of things: