Credit Card Opportunities

In addition to government contracting, there is a whole new area of opportunity that isn't included in the figures above: credit card buying, often referred to as "micro-purchasing," using IMPAC cards, now called Federal SmartPay.

In Fiscal Year 2008, the federal government spent an additional $19.9 billion in credit card purchases. Yes, you read that right, $19.9 billion in business just using that little old piece of plastic money. Since 1984, when credit card purchases were first authorized, the number of credit card transactions has grown to 25.5 million in Fiscal Year 2008. This means that, on average, over 69,000 transactions were placed each day. The amount of dollars spent with credit cards by government personnel, not just official government buyers, grew from $1.6 billion to almost $19.9 billion.

In all, about 70 percent of all procurement transactions in government are for micro-purchases (i.e., sums under $3,000) and are done with a credit card. This is similar to the situation in the corporate world. There are over 275,000 cards in use today.

Although the largest credit card user was the Department of Defense, every government office utilizes credit cards for almost everything it needs. This means that you can potentially have a government customer right next door. And the best news is there is no contract.

Does your company accept credit cards? If not, you might want to think about the advantages of offering credit card purchasing as a part of your business strategy. Here's more information on how to establish a merchant account so you can accept credit cards.

Work Smart Getting a merchant account is different than it used to be. A bank will want to know what I was going to use it for, who my customers were, how many charges there might be, and so on. Actually, what they wanted was a business plan. If your bank asks for that information, consider it an opportunity to create a plan that helps you think about where you're going and how you'll get there. The government most often uses MasterCard or Visa, but does use others like American Express and Discover. If you decide to set up your account for either MC or Visa, you should be OK. It is best to shop around because the charges vary significantly. Something else to consider is using the newer wireless systems that allow you to use it where needed without being hard-lined to a given location. Depending on the usage level, it may pay to buy the hardware rather than rent it. Choose the most cost-effective method for you.