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Every AP Team Should Prioritize B2B Credit Card Payments in 2019

Businesses are (finally) realizing the multitude of benefits that come with B2B credit card payments.

Paper checks as a B2B payment option are gradually disappearing. A contributing factor to this decline has been the increased usage of B2B credit card payments in the accounts payable process. The multitude of benefits that come with using credit cards to pay their vendors is finally starting to become clear to businesses. In addition to eliminating the hard costs and the fraud risk associated with paper checks, making B2B credit card payments can improve short-term cash flow and create substantial working capital benefits.

Up to this point, however, credit cards have been very under-used as a B2B payment method for vendor invoices. And while we have not quite reached the tipping point for credit card usage in accounts payable, there is evidence suggesting we are well on our way to having a majority of businesses making B2B credit card payments for a portion of their vendor invoices. Supporting this notion is a study that demonstrated a YoY percentage increase of 130% for businesses that used B2B credit card payments.

Here are the major driving factors behind that trend:

Credit Cards Provide Extended Working Capital Benefits While Keeping Vendor Payments On-Time

By using your corporate credit card to pay vendor invoices, you can extend the amount of time you are able to hang on to large sums of money before turning it over to your vendors. This virtual “loan” that you create by making B2B credit card payments enables you to optimize working capital as much as possible while still making your payments on time.

In spite of this advantage, a MineralTree study found that nearly 80 percent of businesses are not making B2B credit card payments. Among the top reasons cited for not utilizing credit cards were company policies that prevent it, a lack of insight into whether or not vendors accept card payments, and the fact that the process of making card payments to vendors is too cumbersome.

These obstacles can be removed by simply revisiting and updating internal policies, improving communications with vendors regarding the payment methods they will accept, and finding solutions that streamline the process of making credit card payments. While businesses will not be able to move 100% of vendor payments onto corporate credit cards (because not all vendors will accept this form of payment), they can still reap the benefits of maximizing the number of payments that they can make with cards.

Virtual Cards Make Electronic Payments More Secure and More Accessible

Many businesses who are taking advantage of B2B credit card payments are also utilizing virtual cards. A virtual card is a unique, randomly-generated card number linked to a main credit card account that can be used to pay a specific vendor invoice for a specific dollar amount.

Virtual card payments can be processed by any vendors accepting traditional credit cards. A major differentiator for virtual cards is that they are more secure than traditional card payments. Once the randomly-generated number is passed to the vendor, they can only charge it one time for the exact amount of the payment. This avoids the need to share overarching credit card and bank account info, and decreases the likelihood of account takeovers.

Your business can also receive rebates when issuing the same payments you are already making by taking advantage of the 0.5% cash-back rebates that virtual cards offer. For every million dollars you pay in vendor invoices, that’s $5,000 you get back, which can be invested in capital improvements, the IT infrastructure, employee programs, or other corporate initiatives.

Automating AP Makes It Easy to Pay With Credit and Virtual Cards

An accounts payable automation platform simplifies the process of paying with cards by centralizing the AP process into one cohesive workflow. The entire process, from the time you receive an invoice to the time you pay that invoice, is accelerated by cutting out the amount of manual intervention required. This includes the steps for capturing data on vendor invoices, securing invoice approvals from business units, getting payment authorizations, and executing the payments.

By enabling you to move away from manual AP processes, an automated platform also streamlines the process of making B2B credit card and virtual card payments. While businesses have needed to utilize a distinct login credential with their credit card issuer, and then go through a whole separate set of steps to get credit card payments out the door, AP automation platforms simplify all of it to just a few clicks.

Are you curious to see what your team can look like with an accounts payable automation platform? Contact MineralTree for a personalized demo!


Scott Siegler
Scott is the editor of MineralTree's Invoice-to-Blog, and also the curator of The Proper Payable, a weekly email newsletter covering the best (and worst) in financial strategy.


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