Micro Purchasing: Credit Card Opportunities

Posted by Administrator on April 25th, 2007

Often referred to as “micro purchasing” (sums under $2,500), credit card purchasing presents another sales opportunity in addition to government contracting. Did you know that 70% of government procurement transactions are micro purchases through credit cards?

Just a few years ago, in 2003, the federal government spent $16.4 billion in micro purchases! Since credit cards were first authorized in 1984, credit card spending rose from 4.2 million to 26.5 million in FY 2003. That means that on average, 72,587 transactions were processed each day!

Largest Credit Card Users for Micro Purchases: Federal Agencies

The following agencies spend almost $12.1 billion per year by using micro purchasing to buy almost everything they need:

Department of Defense
Department of Veterans Prime Vendors
Department of Veterans Affairs

What are the Most Common Credit Cards Used for Micro Purchases?

Government agencies typically use MasterCard and Visa for their micro purchases. Some government agencies may use Discover or American Express, but you’re probably safer to choose MasterCard or Visa. It’s a good idea to look around at credit card rates, too. Wireless systems are another thing to consider – they allow you to use them wherever it’s convenient, so you’re not tied to a specific location to complete the micro purchase transaction.

What does this mean for your business? If your company doesn’t accept credit cards, you could be missing out on quick sales opportunities in micro purchases. If you are interested in micro purchasing, contact your bank about a merchant account and be prepared with a copy of your business plan. They may want to verify your business’ use of the credit cards and the micro purchases.

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