Payment Methods

» Posted by on Jan 10, 2014 in Payment Methods | 0 comments

The United States Government used to buy transportation services with what we call GTR (Government Transportation Request). This method of payment is being phased out and will be replaced with charge cards. In 1998 a law was introduced to mandate the use of charge cards to pay for travel expenses; thus the GSA SmartPay was introduced.


GSA SmartPay:

This program provides transportation purchase for over 350 Government agencies and organizations. This method expired in 2008 and was replaced by SmartPay 2.


GSA SmartPay2:

With new technology and expanded services, these uniquely numbered for recognition as Government issued charge cards, were issued by 4 contractors: GE Capital Finance, JP Morgan chase, Citibank, US Bank.  Cards issued to agencies or organizations are called CBA (Centrally Billed Accounts) and those issued to individuals are called IBA (Individual Billing Accounts). CBA cards are liability rest with the government and the IBA cards liability rests with the individual traveler. The SmartPay program offers 2 alternatives to IBA cards: travelers-checks and pre-funded card. These two methods prevent overspending or delinquency and these 2 methods are used for those government personnel that do not posses government issued cards.

Enhancements & benefits of using these cards include: one method of payment, minimize cash advances, Electronic Payments to vendors and Electronic reimbursement to travelers, tracking data, faster transactions, new look with anti-misuse / abuse features & increased security methods such as email supervisor once card is used.

Airlines will only issue tickets with Government/military fares against these cards.

When using Government cards to purchase tickets TMC/CTO, the TMC/CTO through ARC issues tickets against these cards; airlines charge the banks who in turn charge the government, thus eliminating the risk of tickets not being paid. After that with the help of the TMC/CTO, the government reconciles the bank statement with ticket issued to confirm that the statement items are being correctly billed.

In regards to hotel accommodations and rent a car, IBA cards are usually used, but some hotels or car companies might establish a direct billing on a CBA card with arrangement with the traveler’s office.


Direct Billing:

An agency can set up a direct bill method with a seller under a blanket purchase agreement; however this would not work with airlines since government fares have to be paid by Government cards with the exception of chartering whole flights.


Refunds and Ticket Status:

With the advent of Electronic ticketing, a tracking system id possible to find out if a ticket has been used or it is valid for refund. These refunds have to be given back to the government by crediting the same cards it is issued against.


 Business Intelligence and Travel Data:

By using the government credit cards, a treasure of data is at the finger tips of the government. To get these data electronically, a bid was issued and TRX Inc. of Atlanta won it.

By utilizing these data the government can Increase their buying power,  facilitate, simplify procedures, consolidate travel management, reduce unnecessary paperwork, implement & adopt best practices.

The only issue that is been worked upon till now is the safeguard of private data.

By: Metri Altwal

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