Magazine article American Banker

3 Big Card Firms Agree on Purchase Coding Standard

Magazine article American Banker

3 Big Card Firms Agree on Purchase Coding Standard

Article excerpt

American Express Co., MasterCard International, and Visa U.S.A. are supporting a standard approach to transaction coding that they say can help streamline their purchasing card programs.

The competitors agreed that a system developed by Dun & Bradstreet Inc. can help their customers reduce the costs of purchasing management.

Many companies do not know what they are buying nor which vendors they are using, according to D&B, Murray Hill, N.J. They can end up buying the same item from multiple suppliers.

By encoding the types of products and services they use, companies can "leverage their buying power," said William J. Schoch, director of the purchasing division in Visa's commercial card products.

With the big card companies' support, the 10-digit system could evolve into a formal industry standard.

Though fewer than two dozen companies now subscribe to the draft version, Dun & Bradstreet plans to market it aggressively when it is formally released next year. Though the code is free, D&B hopes to earn money helping companies install it.

The system is also designed to foster electronic commerce, officials said.

Purchasing cards, a fast-growing piece of the commercial card business, do not now yield the transaction details of paper purchase orders. Once the code is adopted, card issuers can include it with their transaction reports so companies can see what items they are buying.

American Express looks at standard product and service codes "as an invaluable way for us to organize purchase information across a vast array of commodity groups," said S. …

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