Final answer:
Corporate Debit cards, alias Procurement Cards, simplify business transactions by allowing direct fund transfers from a company's checking account to the seller. They are distinct from credit cards, which represent short-term loans. Smart cards store specific value for purchases but can be limited to particular venues and items.
Step-by-step explanation:
Corporate Debit cards, often called Procurement Cards, are financial tools used by organizations to streamline the purchasing process. They operate similarly to personal debit cards but are used for business transactions. When making a purchase with a corporate debit card, the funds are electronically transferred directly from the company’s bank account to the seller’s account. As with personal debit cards, the presence of a major card network logo, such as Visa or Mastercard, allows these cards to be accepted at a wide range of merchants.
Unlike credit cards, the use of debit cards does not result in a short-term loan from the issuing institution. Instead, they represent an immediate draw on existing funds within the company’s checking account. The notion of “plastic money”, including debit cards, credit cards, and smart cards, reflects different methods of moving money, but does not alter the total amount of money within the economy. These tools offer efficiency and convenience for transactions, yet are not equivalent to the creation of money itself.
Smart cards differ from regular debit cards as they can store a predefined amount of money for use, although they often have restrictions regarding where and for what purchases they can be used.