The difference between a P-card vs corporate card lies in where they are used, their spending limits, and more.

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What is a Purchase card or P-Card?

A purchase card or P-card is a payment card that lets your team or employees buy the things they need without the long process of raising a purchase order. It is issued by a bank or a financial institution to simplify low-value, high-frequency purchases like office supplies, software subscriptions, or vendor payments.

With a P-card, your finance department or accounts payable has complete transparency over all the expenses happening. They can select the merchants from whom purchases can be made and, at the end of the month, receive an itemized monthly statement or data feed, which integrates with their expense management system. This allows them to predict recurring payments and take advantage of any early payment discounts offered by merchants or providers, hence saving money.

Features of a P-Card

A P-Card offers transparency and control over every dollar spent from the business accounts. With a P-Card, you can:

• Set transaction or monthly limits to control spending at an individual level.
  
• Deploy P-cards only to specific Merchant Category Codes (MCC), for example, office suppliers or software vendors.
  
• Receive transactions automatically from the vendor, as they’re fed into accounting systems, improving visibility and audit readiness.
  
• Consolidate charges from multiple cardholders into one statement for easier reconciliation.
  

Pros and cons of P-Card

Did you know? The Federal Reserve Board’s 2013 audit for the Purchase Card Program found that the approving official did not conduct necessary reviews and many transactions lacked supporting documentation, leading to non-compliance and a significant loss to the board. So a purchase card program is only as strong as the policies that surround it.

Pros and cons of using a P-Card for your business:

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Founders trying to scale operations without drowning in admin get the biggest benefit here: predictable spend and fewer approval bottlenecks.

P-card use cases

According to the Institute of Commercial Payments, companies that use P-cards can increase their efficiency savings by 55-80% as compared to the traditional process cost. That’s saving $63 on average for every transaction. (Source: IOCP)

Usage scenarios include:

• Simplifying the recurring orders for supplies, software renewals, or maintenance services.
  
• Enforce merchant category codes restrictions for tight cost control.
  
• Consolidating multiple employee purchases into one company bill.
  
• Reducing the time spent on manual approvals of purchase orders and expense reimbursements.
  

What is a Corporate Card?

When teams travel or host clients, founders get hit with unpredictable spend, late reporting, or messy reimbursements. A corporate card gives your team the flexibility while keeping the spend visible and policy compliant. Using your company’s expense management software, employees can easily tag their purchases and upload receipts for policy compliance.

Unlike a P-card, it offers higher spending limits and often comes with cashback^ based on the payments. Additionally, it may also offer loyalty rewards, travel perks, and insurance protection.

Corporate cards for employees are ideal if your organization has frequent business travel or employee-led spending where flexibility, tracking, and convenience take precedence over granular purchase control.

Features of a Corporate Card

A corporate card offers your business higher flexibility and lower processing time to ensure important payments are made promptly. With a corporate card, your team can

• Plan travel, entertainment, and client-related expenses, as it has a higher spending limit
  
• Streamline submitting, approving, and reimbursing employee expenses with integrated systems
  
• Track employee spending and set limits to avoid overspending
  
• Gain rebates and cashbacks with cards like Aspire Corporate cards² that offer you up to 1.5% cashback^ on every business spend, allowing you to do more with every dollar spent
  
• Save time on issuing cards with the virtual corporate cards for employees
  

Pros and cons of Corporate Card

When using corporate cards, having a strong, all-inclusive policy is crucial. Regular checks and training will ensure that your business does not suffer from surprise card fraud.

Pros and cons of using a corporate card for your business:

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If you’re scaling teams across markets, corporate cards keep everyone moving without burying finance under reimbursements and receipts.

Corporate card use cases

In the US, over $300 million in T&E spend is managed by corporate cards as of 2024. (Source: Businesswire) And the main reason behind this is that the rebate gained from using these cards becomes the primary ROI.

Common use cases include:

• Booking flights, hotels, or meals on work trips
  
• Paying for client dinners or networking events
  
• Managing unplanned yet necessary expenses
  
• Aligning payment cycles with project schedules or reimbursement policies
  
• Gaining cashback or miles to offset future business costs
  

Key differences between P-Card vs Corporate Card

While a P-card and Corporate card are used for different purposes, other, more subtle differences separate the two. Here’s a quick card comparison for P-card vs Corporate card:

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Things to consider before implementing the cards

Before rolling out a purchase card or corporate card program, founders must assess internal needs, policy structures, and risk appetite. Some factors you should consider before you decide to get corporate cards for your employees or purchase cards for business include:

1. Identify business needs and define objectives

Analyze what type of spending occurs most often at your firm to choose a procurement card vs corporate card. Many founders run a hybrid program, where they use a P-card for procuring and a corporate card for travel.

2. Establish strong controls and usage policies

When choosing a P-card vs Corporate card, setting up detailed policies is crucial. Train your employees to understand the usage framework that specifies:

• Eligible and non-eligible transaction categories.
  
• Transaction and billing cycle limits on spending.
  
• Approval hierarchies and documentation requirements.
  
• Dispute resolution and compliance audit procedures.
  

3. Monitor and optimize card usage

Integrate the card with reporting dashboards on an expense management system or integrate your accounting tool to fintech platforms like Aspire to execute policies in real-time and shorten close cycles.

Review the following regularly:

• Spending trends
  
• Policy compliance rates
  
• Expense categories
  
• Immediate card closure workflow
  

P-Card vs Corporate Card: Which one should you choose?

If you want to reduce your payment processing costs by up to 72% and gain precise control over purchasing from specific merchants, then use a P-Card.

If your business requires greater spending flexibility for travel, entertainment, and client expenses, along with cashback rewards and streamlined expense reporting, then a Corporate Card is the best option.

Using a combination of both cards in a hybrid program is also common, where P-Cards manage procurement, and Corporate Cards handle travel and entertainment. A hybrid card program will allow you to use P-Cards for controlled procurement and Corporate Cards for flexible expenses like travel and entertainment, combining cost savings and efficiency with employee convenience.

Disclosure: AFT US LLC, d/b/a Aspire, is a financial technology company, not a bank. The Deposit Account and banking services are provided by Column N.A., Member FDIC. FDIC deposit insurance covers the failure of an insured depository institution. Deposits in the Deposit Account are FDIC-insured through Column N.A., Member FDIC and Column's Sweep Program Network Banks. Certain conditions must be satisfied for pass-through FDIC insurance to apply‍