VALUE IN CORPORATE ELECTRONIC PAYMENTS ACCEPTANCE

 

A CONCEPT OF VALUE 

Koller, Dobbs, and Huyett contend that a business’s value is driven by its growth, return on capital, and resulting cash flows; that value is created when companies generate higher cash flows; and that value depends on who is managing the business and the strategy pursued.1

CONNECTING VALUE TO PAYMENTS ACCEPTANCE 

One significant way business leaders and managers can increase business value is to implement and promote acceptance of electronic payments—specifically, acceptance of electronic checks and corporate payment cards.   

 

Acceptance of electronic payments can: 1) increase the average purchase amount of individual orders, 2) increase total transaction dollar volume, and 3) increase the total number of sales for any given time period, by facilitating greater purchasing power for those buyers who can effectively combine budgeted card payment spending with allocated corporate cash.  It facilitates your customers’ corporate card programs and efforts to modernize their accounts payable departments.   

 

Electronic payments acceptance can improve your return on invested capital by reducing collections, automating payments procedures, simplifying your accounts receivable processes, and facilitating integration with other enterprise systems.   

A CALL TO ACTION 

Some firms are delaying implementation of electronic payments acceptance because they view acceptance of paper checks as tried-and-true, while others—not wishing to go the way of the Polaroid camera nor, more recently, the personal computer—are realizing this is an opportune time to gain competitive advantage by improving customer service and updating internal procedures.      

 

How do you value your enterprise?

 

1 Tim Koller, Richard Dobbs & Bill Huyett,Value: The Four Cornerstones of Corporate Finance, (New Jersey: Wiley & Sons, 2011)

 

 

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In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation

 

If you are a merchant that has accepted Visa and MasterCard credit cards for a reasonable time, are you aware that you may soon be entitled to significant reimbursement of interchange fees?

 

On October 19, 2012, a Definitive Class Settlement Agreement (“Class Settlement Agreement”) was filed by retailers, Visa, and MasterCard, with a fair-hearing date set for September 12, 2013, at which time the agreement may become final.

 

WHY IS THIS IMPORTANT?

 

While there is no way to know now exactly how much money claimants, among an estimated 8 million prospective merchants, might receive from the Cash Settlement Fund, at least one firm has estimated each will receive between $400 – 600 for every $100,000.00 of card payments transacted during the designated period of January 1, 2004 through November 28, 2012.1 The actual distribution amount will depend upon such factors as the amount of the fund and the number of claimants.

 

A separate Interchange Fund is scheduled to distribute to claimants 1/10 of one-percent of transaction volume processed by merchants during an eight-month period to begin no later than July 29, 2013— $10.00 for each $10,000.00 in volume. 

 

WHAT ACTION IS REQUIRED?

 

To receive funds during distribution, a claim must be filed using the prescribed claim form, which shall become available when the settlement agreement becomes final.  At that time, claim forms will be mailed to potential claimants and will also become available for completion on-line at www.paymentcardsettlement.com, the official web-site for the class-action proceedings.

 

Merchants wishing to opt-out of the class-action or object to its provisions must do so by May 28, 2013.  Opting out retains the right to independently sue the defendants for past conduct, yet forfeits the right to receive funds under the settlement agreement.

 

 

1 The Green Sheet, April 22, 2013, p. 51.  See also www.paymentcardsettlement.com for detailed information.

 

 

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SECURE INVOICE PAYMENTS

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UPDATED LEVEL III DATA ENTRY REQUIREMENTS

Visa and MasterCard now require Level III data entry for all corporate card types, including corporate, purchase, procurement, and fleet cards. 

Accounts receivable departments can retain 1% of the total amount of invoices paid with corporate charge cards, simply by entering Visa and MasterCard Level III invoice data; a savings of $1,000.00 in unnecessary downgrade fees for each $100,000.00 of corporate card payments processed. 

 PayTrace, a channel partner, has prepared this brief description and five-minute video to educate businesses regarding the ease of providing Level III data for their customers’ use: 

                                             WWW.PAYMENTOPTIONSEPS.COM

 

 

 

 

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A CLEAR DIRECTION FOR ELECTRONIC PAYMENTS B2B

CARD AND ELECTRONIC CHECK PAYMENTS: ARE YOU READY FOR THE ONE GAINING FAVOR AMONG YOUR CUSTOMERS?

Seneca said, “Luck is what happens when preparation meets opportunity.”  Is there ever a better time than right now to start preparing?           

 

 

WHAT IS HAPPENING NOW?

The conversion from paper checks to B2B electronic payments is occurring at an accelerating pace.  Financial executives around the globe in large corporations, and in an increasing share of mid- and small-sized corporations, are encouraging B2B suppliers to accept B2B electronic payments as a way to help them improve cash management, reduce payment transaction costs, and simplify the complete payments process. 

WHAT DOES THE FUTURE HOLD?

The most prominent electronic payments implementation to-date among B2B suppliers has been electronic check acceptance; this picture, however, is changing.  According to the new 2011 Visa Cash Management Survey, “Approximately 25 percent of companies plan to increase their use of corporate payment cards and decrease their reliance on checks in the near future.  Companies believe that corporate payment cards will reduce costs and enable greater cash flow management as a result of more transparent financial data for payables and receivables.”  Aliza Knox, senior vice president, Visa Commercial, Visa International, said, “The research points to a growing industry trend that checks are declining in popularity because more companies are seeking solutions that optimize payment and expense management to help them make better business decisions.”1

 

A PRAGMATIC APPROACH

No doubt, in an unstable, unpredictable, chaotic environment, one in which it may be difficult to take stock of investments, manage change, and develop business, it can be trying just to keep operations running smoothly.  Yet, since chaos is known to yield ordered systems, what better time is there to prepare for the future than right now?   

 

Suppliers that view B2B electronic payments acceptance as an investment in improving customer relations, customer service, and general performance, in addition to its structural advantages—for example, improved cash flow, reduced collections, and simplified payments processing—will be prepared for the increasing opportunities available to those who embrace B2B electronic payments.

 

How’s your luck today?

 

 1 Source:  http://www.ameinfo.com/115098.html

 

 

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