Giving Suppliers A Voice — And A Choice — In The Commercial Card Migration

Commercial card adoption is on the rise as B2B buyers embrace the opportunity to take advantage of working capital float and even open up new revenue streams through rewards programs.

While cards have gained some traction in the accounts payable (AP) department, their progress is hampered by the fact that, historically, the conversation about corporate card adoption has been entirely one-sided.

And, with suppliers left out of the discussion, the commercial card industry has often allowed misperceptions and negative connotations to continue among the community of businesses being urged to accept cards.

“The knee-jerk reaction often is, ‘I’m not paying to get paid,'” says Boost Payment Solutions Founder and CEO Dean M. Leavitt.

In a conversation with Karen Webster, Leavitt discussed the value of giving B2B vendors a louder voice in the conversation about commercial card adoption, and why it’s vital for card programs to be as dynamic and unique as every buyer-supplier relationship is.

‘Acceptance on Your Terms’

The discussion about adopting commercial cards has almost always been one-sided as large corporate buyers seek to take advantage of cards’ benefits without ensuring their suppliers don’t face additional friction by accepting the payment method. Unfortunately, the reality is that many suppliers have historically faced pain points as a result from being forced to take cards.

“Suppliers have had card acceptance thrust upon them with a very rigid set of rules … around it,” said Leavitt.

Boost Payment Solutions is attempting to change the narrative by vowing to enable suppliers to be able to accept cards on their terms. Doing so, as Leavitt noted, means pulling those vendors into the conversation about their biggest concerns about card acceptance, clearing up any misconceptions they may have, and understanding how to achieve benefits for suppliers through a card acceptance strategy.

By understanding under which scenarios a vendor will and won’t accept cards, a clearer path can emerge as to how to broaden card acceptance while empowering suppliers through benefits like faster payments and a stronger relationship with their corporate customers.

“You’re engaging them in a process where suppliers didn’t really have a voice,” added Leavitt. “We’re seeing this have a pretty cosmic impact on the way in which these suppliers are coming on board.”

Overcoming the Anti-Card Bias

One of the biggest hurdles to overcome when convincing a supplier to accept commercial cards is in the cost of interchange.

This creates an “immediate bias against cards,” Leavitt said, but one that isn’t necessarily rooted in reality. For instance, he pointed to one client that recently processed a single payment of $31 million. Only a few years ago, he said, this size of a card transaction would be “unheard of.” But the cost of card acceptance for the supplier was actually less than what would have otherwise been a 2 percent early payment discount if the buyer used a different payment method.

“Suppliers can actually gain by taking cards in certain situations,” said Leavitt. “It’s really about the cost of the transaction, and how that compares to the cost of other types of payment methods and scenarios.”

In an effort to further empower suppliers exploring card acceptance, Boost Payment Solutions announced a partnership with Visa in October that allows Boost to be more flexible with pricing while also facilitating straight-through processing. It’s an initiative that tackles both the cost of card acceptance, as well as the friction associated with having to manually manage card details and payment processing.

Flexible Programs for Dynamic Relationships

At the broader level, another key challenge to commercial card adoption is the traditional rigidity of card programs. But by understanding the unique needs of not only each supplier, but of each buyer-supplier relationship, solution providers have an opportunity to inject flexibility into commercial card programs to meet more businesses’ needs.

The ability to provide a broad range of transaction data that can move along with a payment and integrate into back-end systems, or pricing flexibility, are critical components of the journey to a more dynamic commercial card environment, Leavitt said.

After all, every buyer-supplier relationship is unique — the card programs these business partners implement should be, too. According to Leavitt, it’s a requirement that more organizations are demanding from their financial solution providers.

“Now, we’re able to have all kinds of flexibility to build a credit card acceptance solution that reflects the business relationship between trading partners,” he said. “Why would you think that the same rate structure will work equally as well for different scenarios? The answer is, it doesn’t, and the B2B community has spoken.”