The National Association of Purchasing Card Professionals (www.napcp.org) and First Annapolis Consulting recently collaborated on a survey to address suppliers’ acceptance of Commercial Card payments from the buyer (end-user) point of view. The survey covered commercial card acceptance rates, attitudes and perceptions; requirements imposed by buyers and suppliers; card acceptance challenges and issues; approaches to educating, assisting and working with suppliers; and available resources.
Card Acceptance: Trends and Influence on Supplier Selection
Nearly 75% of respondents report that more suppliers accept card payments than in the past; however, 61% report that suppliers’ resistance to card payments is, at a minimum, somewhat of a problem. While more than 50% indicate that 75% or more of their U.S. suppliers are card acceptors, the rate of acceptance still varies significantly by supplier industry. Resistance (non-acceptance of Commercial Card payments) tends to increase as transaction size rises. When buyers select suppliers, most indicate that card acceptance is important to some degree, while 50% say it is important or very important. Only 13% say card acceptance is not very important to supplier selection.
Key Opportunity: Educating Suppliers on Fee Options Associated with Card Acceptance
The transaction acceptance fee is the number-one reason suppliers give for resisting card payments. “Fees associated with card acceptance are often misunderstood,” says Laura Flandrick, managing director, NAPCP. “Many suppliers don’t understand that fees are dependent on a number of criteria including cumulative dollar volume processed, level of transactional data passed and transaction (or ticket) amount. Suppliers are often eligible for significantly discounted fees, but are typically not aware of the elements that contribute to the reduced rates. Here at the NAPCP, we recognize the need for ongoing education and communication of supplier economics and are working diligently to create a more educated and informed community.”
Building the Buyer-Supplier Partnership
The survey reveals notable opportunity for buyers to learn more about the economics of card acceptance and to consider suppliers’ needs and economics when establishing a payment method.
According to Laura Flandrick, “The education of both buyers and suppliers on supplier economics of card acceptance is crucial for insuring a winning business case on both sides of the equation. Card acceptance creates an opportunity for suppliers to re-evaluate and re-engineer their business processes and eliminate, for example, costly invoicing. However, this focus on process-cost savings is often overlooked because of the lack of knowledge and resources available to buyers and suppliers. Best-in-class, card-accepting suppliers re-define their processes to eliminate steps that are no longer required.”
It is in the end-user organization’s best interest to direct resistant suppliers to resources that will help them understand the options and benefits inherent in accepting cards.
To read the executive summary of End-User Perspectives on Suppliers’ Acceptance of Card Payments visit http://www.napcp.org/supplieracceptance. The full report (complimentary to NAPCP members at www.napcp.org/resourcecenter and available for sale to non-members in the NAPCP store at www.napcp.org) explores all of these elements and much more. The NAPCP website also includes a P-Card Introduction, open to all website visitors, that helps explain the process and key players in a Commercial Card program.
About the NAPCP
The National Association of Purchasing Card Professionals (NAPCP) is a membership-based professional association committed to advancing Commercial Card and payment professionals and industry practices worldwide. The NAPCP is a respected voice in the industry, serving as an impartial resource for members at all experience levels in the public and private sectors. The NAPCP provides unmatched opportunities for continuing education and peer networking through its Annual Conference, Regional Forums, webinars, audio calls, website, newsletter and regular communication. The association sponsors research and publishes timely and relevant white papers, survey results and other documents. The NAPCP launched the Certified Purchasing Card Professional (CPCP) credential in 2006 (www.napcp.org/cpcp). Please visit www.napcp.org to learn more about Commercial Card and payment programs in general, the value of membership, current member demographics, upcoming events and benefits of becoming a partner sponsor.
About First Annapolis
First Annapolis (http://www.1st-annapolis.com) was founded in 1991 with a strategy focused on advising clients in payment-based sectors of the financial services industry. Since its inception, First Annapolis has advised credit and debit card issuers, transaction processors, payment networks, retailers, and other industry stakeholders.
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