Payment options are expanding rapidly. Even though the use of paper checks has been declining for decades, they still make up roughly 40 percent of B2B transactions. But businesses are also implementing a host of other methods alongside these, specifically:
- Credit Cards. Improve financial transparency and provide additional protection against fraud. They simplify purchases and streamline the reconciliation process.
- Purchasing Cards (P Cards). Allow employees to make purchases quickly, without requesting approval from their supervisor. They are an easy way to lower the costs of day-to-day transactions.
- ACH Transfers. These payment options move money directly from the buyer’s account to the supplier’s. Buyers can send funds themselves or permit the supplier to draw the funds whenever a payment is due.
- Wire Transfers. Move funds electronically between buyers and suppliers. Unlike ACH transfers, money sent via wire is accessible immediately.
Why expanded payment options make your customers happy
While it’s unlikely these will supplant checks entirely, digital payments have exploded in popularity because they offer business owners three major benefits.
- Convenience. Digital payments post instantly and cost little to process, which makes them an attractive option for large and small businesses. Making it easier for customers to pay naturally leads to faster payments and higher revenue, as much as 30 percent in some cases. And depending on the needs of your business, you may want to offer incentives for digital payments. The minor fee that you will incur from your credit card processor may be a worthy investment to get your cash in hand faster.
- Greater rewards. Credit cards give your customers rewards for every dollar they spend (ex: rebates, airline miles). However, not all credit cards offer the same rewards. At the same time, spreading purchases out over several cards lets customers maximize the rewards they receive. This gives your customers a greater incentive to pay. Setting a deadline for credit card payments encourages them to pay faster. Allowing them to keep several credit cards on file helps build loyalty because you’re making it easier for them to earn points.
- Ability to balance expenses. Flexible payment options let customers track payments more efficiently. By putting certain charges on specific cards ‒ equipment on one, utilities on another, for instance ‒ they can tell at a glance where their money’s going.