Financial Executives Increasingly Recognize Inefficiency of Traditional Cash Management Processes; Visa Survey Finds Use of Corporate Payment Cards on the Rise as Efficient Cash Management Tool

SAN FRANCISCO--(BUSINESS WIRE)--Oct. 10, 2005--According to Visa USA's annual cash management survey, released today, only 58 percent of financial executives and cash managers view their cash management process as efficient, due to the lack of streamlined operational processes and increases in labor intensive administrative work. This is a marked decrease from the 2004 study, in which 70 percent of respondents said their cash management processes were efficient

In responding to the survey, corporate cash management professionals noted plans to continue reducing their reliance on checks to make commercial payments over the next year, while similarly preferring corporate payment cards over checks when receiving commercial payments:

“By electronifying a greater share of their commercial payments, corporate America is realizing increased cash management process efficiencies with measurable cost saving benefits.”

-- 56 percent plan to reduce use of checks (increase of five percentage points from 2004)

-- 50 percent plan to increase their use of corporate payment cards (increase of 10 percentage points)

-- 76 percent expressed satisfaction with corporate payment cards for receiving payments, as opposed to 60 percent satisfaction with checks

"We continue to see a downward trend in corporate preference for check payments, as adoption and satisfaction of more efficient electronic payment methods, like corporate and purchasing cards, increases," said David Cramer, senior vice president, commercial solutions, Visa USA. "By electronifying a greater share of their commercial payments, corporate America is realizing increased cash management process efficiencies with measurable cost saving benefits."

The survey of more than 400 financial and treasury executives from more than 20 industries provides an in-depth analysis of the effectiveness of today's corporate cash management processes.

Growing Relevance of Corporate Payment Cards

In responding to the survey, financial executives indicate that corporate payment cards play an increasingly important role in the cash management process. While satisfaction with card-based payments has increased to 77 percent from 70 percent last year, their preference for other electronic payment options such as automated clearing house (ACH) payments appears to be declining. Respondents reporting use of ACH for commercial payments has significantly dropped 20 percentage points to 35 percent in 2005.

Corporate financial and treasury executives identified a number of key areas where corporate payment cards have helped improve the cash management process. Some of the areas with the largest increases include:

Providing new levels of data               +12 percentage points to 44
                                           percent
Giving more visibility into cash position  +12 percentage points to 36
                                           percent
Helping forecast future cash needs         +10 percentage points to 30
                                           percent

Respondents also noted the increased relevance of corporate payment cards in several steps of the cash management process: concentration of funds (up 13 percentage points), short term money management (up 10 percentage points), funds positioning and forecasting (up 9 percentage points), collection and application of funds (up 7 percentage points) and disbursement of funds (up 4 percentage points).

Additional Key Findings and Trends

A growing number of respondents (42 percent) said changes in technology, such as improvements in procurement automation or systems integration, have had a positive impact on improving their ability to more effectively manage cash flow, up sharply from 30 percent in 2004.

Even as technology enhances the cash management process, nearly one-third of respondents (29 percent) say changes in corporate governance have constrained their activities, as more requirements are put in place relating to corporate visibility, systems of control and financial disclosures and reporting. Respondents expect changes in corporate governance to be the leading issue impacting the cash management process over the next 12-18 months.

"As financial executives and cash management professionals continue to increase their use of electronic payments, their efforts to adhere to corporate governance requirements should become easier," Cramer added. "Visa's ability to capture and deliver payment detail provides companies an increased level of visibility and control. Our industry-leading commercial card best practices can help them further streamline the entire procure-to-pay process."

About the Visa Cash Management Survey

The Visa Cash Management Survey was conducted by Survey.com over 10 days in August and September 2005 and involved the responses of 410 financial executives and cash managers from across more than 20 industries. The majority of respondents (86 percent) had annual sales of more than $50 million per year, of which 44 percent represented more than $500 million per year. More information about the survey is available on request.

About Visa

Visa USA is the nation's leading payment brand and largest payment system, enabling banks to provide their consumers and business customers with a wide variety of payment alternatives tailored to meet their evolving needs. Visa USA is committed to increasing the choice, convenience, acceptance and security of Visa payments for all stakeholders in the payment system - Members, cardholders and merchants. Through its 14,000 Member financial institutions, more than 482 million Visa-branded cards have been issued to cardholders in the United States. Last year, U.S.-based financial institutions relied on Visa's processing system, VisaNet, to facilitate $1.3 trillion in transactions with unparalleled reliability. Worldwide, cardholders in over 150 countries carry more than 1 billion Visa-branded cards, accounting for more than $3 trillion in annual transaction volume. Visa offers a trusted, reliable and convenient way to access and mobilize financial resources - anytime, anywhere, anyway.

For more information about Visa Commercial Solutions, please visit www.visa.com/commercial.