The B2B payments landscape is dynamic and fast-changing, and A/R teams who continue to do business as usual may find it costlier and more difficult to accept payments from customers.
In our last post of our three-part blog series on B2B payments challenges, Nick Babinsky, Director of Business Development, describes best practices and new technologies that help make payment acceptance more efficient and cost-effective. This week Nick, a payments expert at Billtrust, shares how businesses can make small changes with a big impact.
QUESTION: What are some best practices for business who want to improve their payment acceptance strategy?
NICK BABINSKY: If businesses want to improve their payment strategy, the first step I recommend is to implement an electronic invoice presentment and payment portal (EIPP) if they haven't already done so. A self-service EIPP portal comes with a host of benefits to both you and your customers, but the most compelling feature is that it gives you the ability to completely automate payment acceptance (both ACH and credit card) and cash application. A really good EIPP portal makes payments easy for your customers, and once payments are accepted, generates a payment file that is sent to your ERP and automatically closes out each invoice those payments were for.
An EIPP portal is also beneficial for security. A good EIPP solution will be PCI compliant and will incorporate the latest in encryption and tokenization technologies to keep customer data safe. By removing sensitive data from your systems, EIPP portals can reduce your PCI scope and reduce audit requirements.
QUESTION: What about credit card acceptance specifically? How do businesses make credit cards a more price-competitive payment channel?
NICK BABINSKY: There are a few recommendation which businesses can implement in order to make credit cards cost-effective:
- Automatically pass Level II/Level III data with each credit card transaction to qualify for more competitive interchange rates
- Waive early pay discounts on invoices when a credit card is used
- Limit credit card acceptance to within 10 days after an invoice issued to encourage faster payments
- Mandate paperless invoicing for customers who would like to pay with a credit card
Passing Level II/Level III data is the easiest way to reduce card costs, so I recommend a combination of all of these tactics in order to qualify for better rates.
Want to learn more? Catch up with the rest of this interview series on B2B Payment Challenges.
Part 1 – B2B Payment Challenges: Why is payment acceptance so complicated?
Part 2 – B2B Payment Challenges: Demystifying Virtual Cards
Follow Nick on Twitter @NickBabinsky