Just Released Research Report: The 2005 Purchasing Card Benchmark Survey Results

by Richard Palmer (Eastern Illinois University) and Mahendra Gupta (Washington University in St. Louis)

Purchasing card spending in North America increased from $80 billion in 2003 to $110 billion in 2005 and is expected to rise to $185 billion by 2010, according to a study released in February of 2006 by a pair of academic researchers. This finding is one of many new insights into the progress of purchasing cards in the marketplace found in the 2005 Purchasing Card Benchmark Survey Results. The information in the Survey Results is based on 1,288 responses from purchasing card using organizations that are customers of one of 15 major financial institutions or members of a national purchasing card administrator association.

The survey indicates that the strongest growth in purchasing card spending has been in the corporate sector, where card spending grew by 25% over the past two years. Purchasing card spending at governmental agencies and universities was more subdued, with an actual growth of 15%. Going forward, purchasing card spending is expected to grow at the rate of about 11% per year.

Survey respondents identified a variety of benefits attributable to the use of purchasing cards. Across an estimated base of 418 million purchasing card purchases in 2005, card users generated an estimated $28 billion just in transactional cost savings in North America. Purchasing card users also reported a 68% average reduction in the time elapsed to acquire needed goods and additional discounts through negotiations with vendors.

The rate of growth in purchasing card activity and benefit differed across users. The Results articulate a framework for understanding and controlling purchasing card spending and a variety of the \"best practices\" of high performance purchasing card programs.

The Results also shed light on a variety of trends in the market, such as emerging card distribution patterns and their impact on card program performance, dual and multiple uses of purchasing cards, the use of \"ghost\" accounts, the practice of paying invoices with purchasing cards, card program optimization techniques, and emerging goals organizations have for their purchasing card programs.

The 2005 Results also examines card program management practices, customer satisfaction with card issuer service and technology, integration of card technology with e-procurement, and provides benchmark purchasing card program statistics by size of business, type of governmental unit, and industry category. More information about the 2005 Purchasing Card Benchmark Survey Results can be obtained by visiting http://www.RPMGResearch.com or by sending an inquiry to info@rpmgresearch.com.