Title: Do you like your credit card rewards program?

May 7th, 2014

For the majority of us, the primary reason we use our credit card as a form of payment is the rewards program.  It is not because we cannot pay the bill with a check, or from our bank portal, or from the merchants webpage…we simply want the rewards.  Of course, in the business to business (B2B) process, customers’ logic is no different.

When we consider the various payment technologies in the market place today – cash, checks, ACH, wire transfers, EDI, credit cards – we must come to the realization that credit cards are the only payment technology that your customers can be incentivized for using.  Today, in the retail market, credit cards use typically exceeds 90% of a merchants total revenue.  However, in the B2B marketplace, they only represent about 3-5% of all receivables.  Due to the extremely high levels of use in the retail market, we must realize that the “green grass” for the card networks is in our backyards.  VISA, Master Card, Discover, and AMEX are all seeking greater market share, and there is very little way for them to successfully hit their sales goals without penetrating the B2B markets.  Let’s not forget that they are now public companies that need to show a nice return for stockholders. Therefore, the card networks are aggressively pursuing your customers with new incentives for the B2B merchants.  B2B rewards are most often ‘kickbacks’ of some percentage of dollars paid with purchasing, corporate, commercial, or business cards.  Federal Reserve data shows that card usage is up growing almost 14% each year and our statistics supports these numbers.

Perhaps you have received many more inquiries from customers — or perhaps the bank that issued them their credit card – wanting to pay with a credit card number.  Both VISA and MasterCard have released new Accounts Payable programs that generate a great deal of efficiency for AP departments.  Perhaps more importantly, because of the “rewards,” these programs permit the monthly AP process to become a revenue stream for your customer.  Thus, the battle continues to rage between your customer’s AP department and your AR department.  And we all know, AP represents the customer and the customer is “always right”.  Therefore, merchants are often forced to accept cards when they certainly would prefer not to because of the price.

A little good news: the interchange rates associated with these AP programs can be quite favorable when compared to traditional B2B rates.  Additionally, when payments are generated out of the Credit Card AP programs, merchants will receive the remittance information and the transactions are very secure.  Lastly, no special data input is necessary. (We will speak further about this in future articles)

As the card networks seek more transactional volume in the B2B market, it is more important than ever that we learn more about the dynamics of processing.  The card networks do not help you reduce your price by implementing best practices or giving you “do overs” when you overpay on processing.  It is incumbent upon us to learn, implement, and put into practice the best possible solutions.

If the card networks are successful and hit their sales goals, imagine what your costs will be if they double their volume.  Amazingly, they hope to hit 10-times the volume in the next decade.  Are you ready? They are.

Rudet Fountain

UTA VP Channel Marketing

Why Use a Trusted Payment Solutions Service Like UTA?

March 27th, 2013

As a business owner, employing smart business payment solutions to treat your business the best you can mean it will treat you well in return.

Too many companies have mismatched books, bad customer checks, and outstanding invoices that add up to a lot of unclaimed money. This, of course, is detrimental to the entire fundamentals of operating your business.

Why not invest in a payment solution that will have customers paying on time—with sufficient funds—and let your books match? Save yourself the hassle of year end reconciliation and know that the funds your business should have by the end of the year are where they should be…in your business bank account.

United TranzActions’ payment solutions have the highest rate of cleared checks in the industry, as well as the top technology to collect payments quickly and efficiently. It’s time to do what’s right for your business—sign up for United TranzActions payment solutions today.

Check Conversion to ACH vs. Check 21 Clearing

October 29th, 2012

RDC is a technology that can process paper checks in 2 ways, keep the item as a check and clear it as a check (let’s call this via Check 21 or an Image Cash Letter) or convert that check to an ACH transaction for clearing.

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Credit Card Purchases May Soon Carry a Surcharge

July 16th, 2012

It happened like most of us thought it NEVER would. VISA and MC have agreed in a settlement of a long-standing court battle to allow merchants to SURCHARGE customers for interchange fees. Call them “swipe fees,” “checkout fees,” or “surcharges,” consumers may have to deal with a new expense at the register if they pay with a credit card, thanks to a $7.25 billion settlement reached Friday. The settlement, which is pending court approval, may come to fruition in late 2012 or early 2013.

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