rbs.com/gbm RBS Supplier Implementation Team Accepting Purchasing Cards

2 Agenda Introductions Background Purchasing cards in general Accepting purchasing cards – the options Open Forum

3 Introductions Roles Areas of responsibility

4 Background Your business has been asked to accept purchasing card payments Accepting purchasing cards improves the delivery of MI You get paid promptly You are in control of taking payment You can reduce your debtors days, and improve the working capital cycle of your business You can use this to take payment from any debtor Fully approved by HMRC see: ?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000134&prope rtyType=document

5 Purchasing card – the myths dispelled Controls Monthly card limits Individual spend limits Preferred Vendor (for hosted cards) can only be used with one supplier Merchant Category Blocking What is a purchasing card? Business to business payment method HMRC approved VAT capture reporting/reclaim process savings/procurement Control Hosted Cards – one card number per supplier, per currency/GL code

6 Traditional purchasing cycle Accounting system updated Supplier paid Requisition Approve Raise PO Order goods Goods received Fulfillment note received Invoice received Three way match (PO, fulfillment and invoice)

7 Accounting system updated Supplier paid Requisition Approve Raise PO Order goods Goods received Fulfillment note received Invoice received Three way match (PO, fulfillment and invoice) X X X X X X Purchasing cycle when using a card Payment received in four working days Purchasing Cards can save up to 85% of Procurement costs

8 Services provided Supplier Buyer Order Bank Payment in full Authorisation Payment Payment process

9 Levels of data transmitted within a purchasing card transaction Level 1 Level 3 Level 2 VGIS – transmits enhanced MI No invoice as PCard data HMRC approved Summary detail Up to GBP5,000 – no invoice Basic Statement description Amount Big O supplies GBP24.00 Statement description NetVATGross Big O supplies StationeryGBP20.00GBP4.00GBP24.00 Cost centre no. Statement description NetVATGross Big O supplies Box ten black pensGBP10.00GBP2.00GBP12.00 Box ten red pensGBP10.00GBP2.00GBP12.00 Cost centre no.GBP20.00GBP4.00GBP24.00 Includes info such as: Unit price, VAT rate Can add: Invoice no., supplier ref. etc.

10 Example of hosted card solution Hosted or ‘Lodge’ or ‘Virtual’ or ‘Ghost’ card Suitable for volume order contracts, e.g. where each supplier holds their own card and claims their money whenever an order is fulfilled Supplier 1 Supplier 2 Supplier 3 Orders Use one hosted card with your business - The card can only be used with you Use many hosted cards with your business When payment needs to be made –Orders placed as per normal –Details captured by supplier by quoting agreed passwords, cost centres, personnel number or using suppliers’ online systems –Agree order and cost of service –Supplier process payment on card which is embedded –Will quote appropriate MI with transactions to aide the cardholder to apply transaction internally and upload to GL The card user does not need to know the card number, nor do you Buyer Claim

11 Options for handling card payments Manual –Terminal – ‘PDQ’ machines –‘Virtual Terminals’ – manual software – – Automated –Simple – the process is driven by the invoice file Integrated Software is widely available, eg Adflex, Commidea, Interactive Transaction Solutions ( ITS ), The Logic Group, and others docid=722c1918-ee a701-6b473c2c1cdd&version=-1 PCI-DSS -

12 Set-up process for automated card payment handling Supplier creates invoice file, in normal way Supplier sends file to software company Software company checks file for suitability Software company pass transactions to acquirer Is file suitable/fit For purpose Supplier uploads small sample of live transactions Go live Yes No Yes No End Start Software company responsibilities Supplier responsibilities Supplier makes changes to the file Supplier advised of changes to be made Software company advises supplier and the business Is the business happy with data received?

13 How both parties benefit Benefits to the card holder / buyerBenefits to you The buyer pays their suppliers promptly, within terms Supplier gains control over obtaining the payment, by choosing when to claim Reduce number of invoices processed Payment can be requested daily and P-card offers a guaranteed payment in four working days Reduction in number of queries from supplier – frees up time to concentrate on more strategic, value add tasks with supplier Cash flow is improved as no need to wait for payment to be made under invoice method Adheres to the prompt payment directives Reduces administration (billing and collection costs) and the need to chase up lost/missing invoices Enables your business to seek business where Purchasing Card is the preferred payment method

14 Points for further Discussion: You may wish to jot down your questions or issues you wish to raise

15 No representation, warranty, or assurance of any kind, express or implied, is made as to the accuracy or completeness of the information contained in this document and RBS accepts no obligation to any recipient to update or correct any information contained herein. The information in this document is published for information purposes only. Views expressed herein are not intended to be and should not be viewed as advice or as a recommendation. You should take independent advice on issues that are of concern to you. This document does not purport to be all inclusive or constitute any form of recommendation and is not to be taken as a substitute for the recipient exercising his own judgement and seeking his own advice. This document is for your private information only and does not constitute an analysis of all potentially material issues nor does it constitute an offer to buy or sell any investment. Prior to entering into any transaction, you should consider the relevance of the information contained herein to your decision given your own investment objectives, experience, financial and operational resources and any other relevant circumstances. Neither RBS nor other persons shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this communication. The products and services described in this document may be provided by The Royal Bank of Scotland plc, The Royal Bank of Scotland N.V. or both. The Royal Bank of Scotland plc. Registered in Scotland No Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The Royal Bank of Scotland plc is authorised and regulated in the United Kingdom by the Financial Services Authority. The Royal Bank of Scotland N.V. is authorised by De Nederlandsche Bank and regulated by the Autoriteit Financiele Markten (AFM) for the conduct of business in the Netherlands. The Royal Bank of Scotland plc is in certain jurisdictions an authorised agent of The Royal Bank of Scotland N.V. and The Royal Bank of Scotland N.V. is in certain jurisdictions an authorised agent of The Royal Bank of Scotland plc. Copyright 2010 RBS. All rights reserved. This communication is for the use of intended recipients only and the contents may not be reproduced, redistributed, or copied in whole or in part for any purpose without RBS’s prior express consent. James Nash – Senior Supplier Implementation Manager, T +44 (0) | M +44 (0) st Floor | 200 Bishopsgate | London EC2M 4RB | UK Phill Tyler – Senior Supplier Implementation Manager, T +44 (0) st Floor | 280 Bishopsgate | London EC2M 4RB | UK