We are in a different business environment than we have known for decades. And according to John Weinrich, US sales manager at Boost Payment Solutions, there is an opportunity for businesses, regardless of size and industry, to consider or reconsider card acceptance.

Inflation is a priority and the cost of capital is high.

Suppliers, in particular, Weinrich said, are grappling with seeing pressures they’ve never faced before. At least in terms of purchasing power, the value of a dollar has gone down markedly, which means that waiting 60 or 90 days steadily erodes the value of the money coming into that provider’s account.

The high cost of capital, at over 5% for many small businesses, makes financing transactions through loans unpleasant. Most businesses don’t have top-notch credit ratings, which means they would have a hard time accessing financing in the first place.

“For these reasons and a host of others, I strongly urge businesses to think carefully about their commercial card acceptance policy,” he said.

He noted that virtual cards, in particular, are here to stay and are the fastest growing segment of the commercial card market, growing at over 20% annually. The global value of virtual card transactions was approximately $1.9 trillion in 2021 and, in just a few years, could account for more than half of commercial card spending, marked by the virtues of straight-through processing.

In this context, we are a long way from the ubiquity of cards, Weinrich said. Historically, there has been a perspective that commercial cards only had value to the buyer through rewards, discounts, or extending their payment days. Many businesses and vendors have avoided accepting commercial cards for B2B receivables because conventional wisdom has been that it’s cumbersome and expensive to implement – ​​and infrastructure compatibility remains a concern.

“Asking companies to try something new in the B2B space can be especially daunting in this environment,” Weinrich said. But he noted that platforms like Boost could make it easier to implement AP and AR automation. More and more executives are realizing that augmented reality automation is an effective way to increase a customer’s lifetime value.

Accepting cards, he said, can help both buyer and supplier manage cash flow more effectively in an inflationary environment, as they provide opportunities to monetize payments and avoid late payments, which in turn can strain business relationships.

Weinrich noted that fraud is lower with commercial cards and virtual cards — at just 3%, compared to double-digit rates for other payment types. He added that automated clearing house (ACH) and check processing can have its own issues, including manual errors, especially for small businesses with overburdened staff.

The benefits increase up and down the supply chains, he said, as it becomes easier to reduce DSOs and track customers and transactions. Businesses that accept cards can protect existing revenue from competition and potentially increase sales from existing customers.

The urgency is there since 56% of buyers ask for several payment options.

“Returning benefits to their buyers is truly a win-win situation,” he said, adding that “the use and acceptance of commercial cards can increase the chances of retaining customers and winning new business.” “.


About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.

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