3 payments challenges holding you back

Blog | March 10, 2020

Reading time: 2 min

As payments technology progresses, benefits should accrue on both sides of the buyer / supplier payments relationship. But the rise of AP automation and card payments have seen most of the gains on the buyer side – and suppliers are rebelling, in some instances, by turning off card acceptance altogether.

How did we get to this point? Let’s review the three main card-related payments challenges suppliers are dealing with:

1. Interchange fees are too high

Card payments are great for delivering quick, fully funded payments with remittance attached. But high interchange fees are cutting into suppliers’ margins. Many suppliers are settling their credit card payments with level 1 data, the same level of data that is generally captured during consumer transactions. It includes: total purchase amount, date, merchant category code and supplier name.

If this is all the data your payments process is capturing and using to settle funds, then you will be paying the highest interchange rate on your transactions.

Level 2 and Level 3 data captures many more data points, with Level 3 encompassing line item detail equivalent to the information found on an itemized invoice.

If your process is capable of settling transactions with Level 2 or 3 data, you will be rewarded with lower interchange fees for every transaction.

2. Security and PCI compliance

Information security is a major organizational challenge for many suppliers. The Payment Card Data Security Standard (PCI DSS) applies to companies that accept credit card payments. If your company wants to store, process and transmit cardholder data, then that data needs to meet strict data security standards.

3. Overly manual processes for card payments

We’ve already covered how manually interacting with card numbers can lead to behaviors that fail PCI compliance standards. But manual processes have another drawback – time.

According to internal Billtrust data, the average B2B card payment takes an A/R professional 5.5 minutes to process and apply. This is because most card payments are coming through email and phone calls that staff must be available to answer. Additionally, A/P providers often call suppliers looking to gain adoption of their payment cards and staff must be ready to accept these calls as well.

All in all, B2B card payments pose many challenges to suppliers, and their positives are getting overlooked. But technologies like accounts receivable automation and the supplier-driven Business Payments Network (BPN) can help optimize card payment acceptance and allow suppliers to appreciate card’s many benefits. Read our white paper Payment on your terms: The financial professional’s guide to the modern payments landscape to learn more.

And if you have further questions, please reach out to Billtrust.