What Is a Purchasing Card (P-Card)?

The federal government calls it a purchase card. Under FAR 13.301, the Governmentwide commercial purchase card is authorized for use in making and/or paying for purchases of supplies, services, or construction. Contracting officers and other designated individuals may use it, and only for purchases that are otherwise authorized by law or regulation. The card may be used to make micro-purchases, to place a task or delivery order, or to make payments when the contractor agrees to accept payment by the card.

GSA SmartPay, the federal program, describes its purchase account as a procurement and/or payment mechanism for buying required goods and services and paying against government contracts.

GSA's purchase card training says the agency program coordinator sets two spending limits when the account is set up: a single purchase limit for each transaction and a monthly purchase limit. Merchant category code (MCC) blocks may also apply, to prevent fraud and misuse.

States run their own programs. Maine's procurement card program gives state employees the ability to purchase goods and services related to official State business.

GSA's guidance for merchants covers the seller's side:

• Acceptance. A merchant that already accepts the card brands GSA lists is already set up to accept GSA SmartPay cards.
• Fees. The transaction fees negotiated with the bank to accept cards from the private sector also apply to government purchases.
• Blocked categories. Agencies block certain MCCs. If a business has trouble accepting GSA SmartPay cards, GSA says its MCC may be blocked, and it can change its MCC classification to better describe what it sells.
• Sales tax. All GSA SmartPay purchase cards are centrally billed accounts and should be exempt from state sales tax.

Illustrative figures. A federal facilities buyer orders 40 cases of cleaning supplies at $29.50 a case: 40 x $29.50 = $1,180. Her account's single purchase limit is $2,500, so the order goes through as one card charge.

If she needed 100 cases, the total would be 100 x $29.50 = $2,950, over the limit, and the charge would be declined at the point of sale. GSA's training says it is never permissible to intentionally divide a purchase into parts just to get under the limits, so the order cannot simply be split into two charges.

On Shopify, the B2B card options include:

• Shopify Payments. It accepts credit cards, debit cards and local payment methods, including ACH bank direct debit. Shop Pay, Shop Cash and Shop Pay Installments are incompatible with Shopify B2B.
• Vaulted cards. With Shopify Payments, B2B customers can save a card to a company location at checkout or in customer accounts. You can also charge it on orders and draft orders from the admin.
• Terms with a card on file. On an order with payment terms, the buyer can pick the card to charge at the end of the term. It isn't charged automatically when the terms expire: you charge it manually or automate it with Shopify Flow.
• PO numbers. Draft orders accept a purchase order number and a credit card payment, so a card payment can still carry the buyer's PO reference.

Uncap's guide to B2B ecommerce payments sets cards beside ACH, net terms and wire. Cards are the fastest way to accept B2B payment and are familiar to all buyers, and a buyer's corporate card can be stored securely at the company account level and reused for repeat orders without re-entry.

• Net 30
• Payment terms
• Trade credit
• Purchase order
• Punchout
• Tax exemption certificate

• Acquisition.gov: FAR 13.301 Governmentwide commercial purchase card
• GSA SmartPay: Vendor guide
• Shopify Help Center: Setting up credit card vaulting for B2B