Lesson 3: Travel Card/Account Use and Payment Solutions
What is the appropriate use of the GSA SmartPay® Travel card/account?
The GSA SmartPay Travel cards/accounts may be used ONLY for authorized official travel and travel-related expenses. Official travel expenses are broadly categorized as transportation, lodging, meals and incidentals.
The travel card/account must not be used for personal expenses unrelated to official government travel. This is considered to be misuse of the account or use of a federal payment solution by an authorized user for other than the official government purpose(s) for which it is intended.
To help prevent misuse, the travel card/account may be electronically coded to be rejected at merchant locations that your agency has determined are not necessary for conducting official government business.
Some agencies allow the GSA SmartPay Travel card/account to be used for local travel.
Here’s an example of local travel use:
Sarah is traveling to a training class in Washington, D.C., which is located within the vicinity of her regular duty station. To attend the event, she must either take a taxi or public transportation. Official government travel authorization is not provided or necessary for this class. However, Sarah is able to use her GSA SmartPay Travel card/account because her agency policy has authorized employees to use their IBA travel card for local travel and related expenses.
How does the GSA SmartPay Tax Advantage Travel card/account work?
The Tax Advantage Travel card/account is issued to an employee designated by the agency/organization in the employee’s name.
Agency/organization program coordinators (A/OPCs) will work with their contractor bank to identify Merchant Category Codes (MCCs) for rental cars and lodging to be excluded from taxes.
Accounts will be established using IBA procedures, to include credit checks or other creditworthiness assessments.
When the card/account is used, invoices will be sent to the employee and the agency/organization for payment via split disbursement.
The CBA portion of the charges will be paid by the agency and the IBA portion of the charges will be the responsibility of the employee.
Agencies/organizations must specify invoice elements in their task order level requirements.
Here’s an example of Tax Advantage Travel account use:
Andrew is on official government travel and is checking into the hotel using his Tax Advantage Travel card/account. The process does not change from how hotel merchants run the card and verify tax exemption status today. The hotel will need to verify (through use of the 6th digit and the BIN) that the payment is being directly provided by the government through the CBA function. Once verified, Andrew will provide any required CBA forms to the hotel. Required forms vary from state to state and can be found on the GSA SmartPay website. Even if the state does not exempt taxes for the IBA transactions today, it is still required to exempt all of the CBA transactions. At the end of the month, when Andrew receives his invoice from the bank, the hotel should already be paid for through his agency’s CBA process. He will just need to pay for his meals and incidentals.
What are some of the strategic payment solutions offered under GSA SmartPay 3?
Strategic payment solutions provide agencies/organizations with increased payment flexibilities and strategies for making payments.
Strategic payment solutions offered under the GSA SmartPay 3 Master Contract include:
- Replaces the accounts payables process such that electronic transactions take place directly between the government and the supplier.
- Typically used with merchants who are traditionally paid by convenience check or electronic funds transfer (EFT) and do not accept charge card payments.
- Examples include straight-through processing, buyer-initiated payments, supplier-initiated payments, procure to pay and other card-not-present solutions.
- Provides the ability to access the Electronic Access System (EAS), pay invoices, receive text/email alerts and view statement and payment information over a mobile device.
- Upon request, your contractor bank provides mobile application capabilities at no additional cost.
- Your contractor bank provides the ability for card/account holders to make secure payments using a mobile device at the point-of-sale (POS).
- The process of ensuring that merchant discounts or refunds offered are deducted at the POS and guaranteeing such discount arrangements.
- The contractor bank ensures that discount information is identified on the invoice and passed to the agency/organization, when available.
- For example: An airline ticket costs $250 and the merchant offers rebates of $50 off the ticket price to the agency/organization based on existing agreements. The contractor bank shall net bill the agency/organization $200 for the transaction.
Single-Use Account (SUAs)
- Leverages a single virtual account number for each payment.
- The limit on each account is set to the specific payment amount.
- Internal controls such as Merchant Category Code (MCC) blocks, spend limits, timeframes and account expiration dates can be used for increased control.
- Agencies also have the ability to append accounting data for seamless reconciliation.
- Examples of use include invoice and contract payments, which help to ensure that merchants are not able to charge more than approved amounts.
- Benefits include:
- Accounts can be activated in real time.
- Controls can be placed on account allowing for increased oversight of spend
- Disposable, one-time use account numbers reduce the risk of fraud.
- Seamless reconciliation.
- Reduces the necessity for using convenience checks.
- Use of a secure, unique “token” in place of a 16-digit account number to provide extra security for transactions.
- One-time use account numbers that may be used during a limited time, for a limited amount and possibly for a specific merchant.
Declining Balance Cards
- Can be applied for a specific purpose, a finite balance or for a specified time period.
- Credit limits can either be reset as needed or the card becomes inactive once the balance is used.
- Easily loaded and distributed to employees in case of emergency or disaster situations.
- Benefits may include:
- Financial flexibility and security.
- Reduction of agency/organization administrative fees.
- A flexible option for applicants who cannot be issued a traditional card/account.
- Safe and excellent alternative to cash and paper checks.
- For agencies who frequently do business with one merchant and have recurring payments.
- An account number can be assigned to the merchant and authorized agency personnel transactions occur without having to use multiple cards or accounts.
- Many agencies use this product for purchases such as airline tickets.
- Benefits may include:
- Reduced number of open accounts (payment processing and oversight easier).
- Allows for multiple users.
- Allows for a high level of control.
- Reduces the risk of lost or stolen cards.
Are there exceptions to using the GSA SmartPay Travel card/account while on official travel?
Yes, exceptions to using the GSA SmartPay Travel card/account include:
- The vendor does not accept the payment solution.
- The GSA Administrator granted an exemption (FTR Subpart H §301-70.700).
- Your agency head granted an exemption.
The GSA SmartPay Travel card/account may be used for authorized official travel and authorized travel-related expenses ONLY. Official travel expenses include transportation, lodging, meals and incidentals. The travel card/account will be printed in the cardholder’s name and must not be used by any other person. The cardholder is personally liable for all charges made on their travel card/account. They should not use their government travel card/account for any personal expenses.
What is Section 889 and how does it apply to purchases?
Section 889 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year 2019 (P.L. 115-232 [PDF, 789 pages]) and the Federal Acquisition Regulation (FAR) Case 2018-017 prohibit the purchase of covered telecommunications equipment and services from merchants who sell products containing spyware. These devices could pose a threat to U.S. security by spying on or disrupting communications within the U.S. Therefore, GSA SmartPay card/account holders should follow their agency’s policy regarding Section 889 compliance.Next