B2B Payments

Forecasts Call For Supplier Card Acceptance


It’s prediction and forecasting season with the start of the new year. In B2B, 2016 seems to be the year of commercial cards, with new research and analysis emerging regarding the hopeful rise in card acceptance among suppliers and vendors.

One of the latest is “Driving Up the Value of Commercial Card Acceptance for Suppliers,” a Mercator Advisory Group report with insight from Visa and MasterCard on how corporations can help their business partners begin accepting electronic payment.

“There is a tremendous upside to card scheme acceptance, for which banks and buyers hold the keys,” stated the report’s author, Richard Hall, Mercator commercial and enterprise payments advisory service director.

[bctt tweet=”‘There is a tremendous upside to suppliers’ card scheme acceptance.'”]

The report, which was released just weeks before the start of 2016, highlighted the knowledge gap among suppliers regarding how cards can reduce their costs; suppliers and banks, on the other hand, are well-versed in the financial benefits of card acceptance — mainly, that suppliers will see less friction in getting their outstanding invoices settled, Mercator found.

On this premise, analysts have begun the year musing about the potential in suppliers’ credit card acceptance.

Reports from The Economic Voice on Tuesday (Jan. 5) highlighted the key benefits of card acceptance in the B2B sales chain.

“In the highly digital and Internet-based world of today, options for electronic payments via credit cards and online accounts are essentially the norm, with traditional cash and personal check payments becoming more and more out of date,” the site concluded.

Speed, greater security, more automated accounting and a broader appeal to corporate buyers are some of the key benefits of card acceptance, the report listed.

Only days prior, reports by Forbes released predictions for how 2016 will change the way the supply chain operates. According to BMO Financial Group Vice President of North American Corporate Credit Card Products Steve Pedersen, card acceptance will climb the ranks of priorities for suppliers.

“The benefits associated with card acceptance will push more suppliers to accept this payment method, as buyers will take their business to those that do,” he told the publication. “In 2016, card acceptance will no longer be an AP-only issue. It will have a direct impact on customer retention.”

The executive added that new chip technologies mean enhanced security and, in the coming months and years, greater adoption of card payment acceptance by suppliers. In turn, that will bring efficiency to the supply chain, make supplier payments faster by reducing days sales outstanding, cut errors that stem from manual payment processing and nix the need for paper-based invoice processing and delivery, said Pedersen.

The Knock-On Effects

An increase in supplier acceptance of commercial card products will have a slew of knock-on effects. Faster payments and access to more robust spending data for payers are some, but recent research also suggests that more commercial card use could mean more fraud.

“Commercial cards have always had unique challenges to manage fraud,” said Hall, who also recently authored a separate report, “Fighting Commercial Card Fraud and Bridging the Information Gap,” released last month.

Perhaps the most prominent concern among suppliers is the cost associated with accepting commercial cards. Ongoing interchange fee legislation in both the U.S. and Europe is expected to curb the fees charged to merchants for accepting consumer cards; these regulations, however, don’t apply to commercial cards, and with card issuers facing a reduction in profits from swipe fees on their consumer cards, some analysts believe these businesses will place new efforts on promoting the more lucrative commercial card side of operations.


Still, it appears that 2016 is slated to see more traction in the commercial card market among suppliers. Mercator’s earlier research found that spending volumes for both purchasing cards and T&E are on the up. Both MasterCard’s and American Express’ introductions of mobile wallet compatibility for its corporate card products may signal a new era for the commercial card in which innovation takes off. Whether suppliers will help fuel corporate card acceptance or hamper it, will only be told with time.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.