With many companies already leveraging virtual payments to increase control, reduce costs and streamline payment processing, there are still many companies that are slow to make this transition due to the perception that vendors will not approve. 

Perception vs. Reality: Do Vendors Prefer Mandated Payment Methods?

07.22.14

With many companies already leveraging virtual payments to increase control, reduce costs and streamline payment processing, there are still many companies that are slow to make this transition due to the perception that vendors will not approve. virtual Payments

To squash this concern that many buyers have, Comdata, MasterCard and Kaiser Associates conducted a survey identifying the difference in perceptions between buyers and suppliers regarding the acceptance of virtual payments.

Results from the survey showed that 63 percent of buyers believe that they have a low degree of negotiating power when it comes to choosing a method of payment for suppliers. In contrast, when asked how likely it would be for them to accept a card if it were mandated by a buyer, 82 percent of suppliers said they would “likely or are very likely to accept” a new method of payment from buyers.

Although many buyers have been under the impression that mandating virtual payments will upset vendors or drive them away, results from the survey indicate that vendors are more open to accepting virtual card payments and have more processes in place to accept e-payments than what organizations are led to believe. Market needs are emerging, and vendors are not the only ones with flexible payment options in place.

In a recent article via Banktech.com, Bob Sneed, SVP of Comdata, explained how financial services providers can set the stage for successful holistic payment programs. As a result of the emerging market, bank-neutral financial service providers for accounts payable disbursements have multiplied, creating more flexible payment options for companies of all sizes. Holistic payment strategies have become important in helping companies reduce costs, improve margins and enhance control of corporate spend.

Banks play a major role in helping their customers create a more holistic payment approach for business by providing a comprehensive set of payment methods, including ACH, credit or single-use cards, wire transfer and virtual cards. Banks can work strategically to ensure that all organizational stakeholders are engaged and involved by designing and executing a holistic e-payment program that includes best practices in gaining management support and organizational buy-in from AP departments, procurement and finance.

In addition, holistic strategies help corporate customers with the technology and resources necessary to deliver funds, and also helps identify opportunities across the entire spectrum of the supplier, including volume, payment, supplier lists and forms of discounts. The growth in e-payments over the years has allowed companies to expend resources and accomplish the goal of streamlining processes. With more resources available today, companies are increasingly looking for cost-savings opportunities. Holistic payment programs provide benefits for financial service providers, customers and suppliers, making it a win/win for everyone.