Powerful plastic


We may have started out paying for
needs with rocks or pebbles, but
plastic has become the method of choice for most Americans. It has been
reported that 75 percent of us now use
credit or debit cards to pay for purchases.
The most dramatic shift has been from
checks and cash to plastic. Now, especially
with those under 34 and earning more than
$30,000 per year, the shift is moving to
debit cards. Debit purchases have grown
from $421 billion in 2001 to $1 trillion in
2006.

“Plastic can be a terrific tool for companies and consumers when used properly
and to their full advantage,” says Roy
Binger, executive vice president and
retail LOB manager at SunTrust Banks,
Inc. in Tampa. “There is a wide variety of
choices that include consumer credit or
debit cards, business cards, purchasing
or procurement cards, fleet cards, and
payroll debit cards.”

Smart Business talked with Binger for
more insight on using plastic for more
efficiency.

Why are we seeing such an increase in plastic for purchases?

For consumers and companies alike,
plastic is easier to use. Carrying large
amounts of cash is cumbersome and can
be dangerous.

For companies, purchasing with plastic
can provide instant, online information
on purchases without the processes of
preparing purchase orders, processing a
plethora of individual invoices and creating checks for each of the numerous suppliers, and finding the authorized person
to sign a check for routine or emergency
purchases. Employees are not always in
a position to pay for travel or other
expenses and wait to be reimbursed by
the company. Record-keeping is streamlined with the use of plastic. Reporting
methods can be customized by your
provider to give you the right combinations of reports to provide the details
needed to analyze your spending.
Another benefit is the credit and debit card industry is unique in that the card-holders are paid to use them. That payment includes reward points, mileage,
rebates and extra services.

What should you consider when choosing
cards?

As a consumer, you should do your
homework in understanding the features
and benefits of your cards. Analyze your
lifestyle to determine what card fits best.
Which saves you time or money? Would
you benefit from travel insurance,
concierge service, extended warranties,
preferred seating, rebates or any of the
other offerings? Read the fine print to
ensure you can use what is offered and
live with the conditions of the card.

For corporate cards, along with the
above, make sure that you can receive
the reports that you need to manage your
business. Ensure that you and the issuer
have agreed upon and set up the controls
on how the cards can be used and who
can use them. Determine if reward points
can be combined for credit and debit
cards. Decide who gets the points.
Develop a plan to clearly inform each
employee on the uses, restrictions and
reporting requirements of card use.

Work closely with your business
banker to determine what card or cards
best suit your purposes and provide the
cash management features and benefits
to optimize your overall profitability.

What are the advantages of fleet cards?

They are especially useful to corporations with many drivers. Some cards provide discounts when employees use the
cards, plus they help the company more
easily track spending and employees
don’t have to use their own funds when
traveling.

What are payroll debit cards?

These are the next evolution beyond
direct deposit for payroll. While many
companies have streamlined their payroll system to direct deposit, that only
works for employees with bank
accounts. For a variety of reasons, not all
employees have or want a bank account.
In those cases, the employer’s workload
is increased because it has to determine
which employees receive checks and
which receive direct deposit. Checks
also increase the workload for employees receiving them as they must stand in
line to cash them and often will pay a
premium cost for that privilege. With
payroll debit cards, each employee has
his or her own card, can use it like any
other debit card and can be rewarded for
card use instead of paying to have their
check cashed.

What are the caveats on plastic use that the
reader should be aware of?

Every card, debit or credit, has disclaimers or footnotes. Make sure that
you read all the fine print and follow the
rules.

ROY BINGER is executive vice president and retail LOB manager at SunTrust Banks, Inc., Tampa. Reach him at (813) 224-2147
or [email protected]. SunTrust Bank Member FDIC