On top of being less efficient and more error-prone, using paper checks to make payments is also considerably more expensive for businesses than some electronic payment methods, says a recent survey from the Association for Finance Professionals (AFP).
In its inaugural 2015 Payments Cost Benchmarking Survey, the AFP estimates the median cost of each check transaction to be about $3.00, compared with that of just $1.50 per purchasing card transaction and between $0.26 and $0.50 for each automatic clearing house (ACH) credit transaction.
"Many B2B companies have been driven away from writing checks altogether."
While these differences may seem minute at the transaction level, they are typically compounded by the potential cash back bonuses companies could earn from using P-cards. Together, the savings have proven significant enough to drive many B2B companies away from writing checks altogether. According to the survey, nearly 80 percent of companies are already in the process of transitioning from writing checks to making electronic payments. What's more, another two-thirds of respondents said they, too, would switch if there were a cost benefit of doing so.
While this shift has already taken place in the retail environment, the AFP data indicates the first major signs of such a change in the B2B market. Up until this point many wholesalers have been hesitant to accept commercial card payments in an effort to avoid the associated interchange fees. However, with so many companies suddenly looking for vendors who will accept electronic payments, your organization could use its ability to process card payments as a sales tool to attract new business.
When transitioning to electronic payments, businesses can, in fact, mitigate costly interchange fees. By equipping yourselves with a B2B payment gateway optimized for commercial and GSA purchasing cards, you can ensure your business submits the Level 3 transaction invoice-level details that will ensure your payments qualify for the lowest possible interchange rates.
For information on how to integrate more B2B payment options into your sales invoice and ecommerce checkout workflows, contact Vantage today.