Making Card Payments To Suppliers Who Don’t Accept Credit Cards

The payments industry has evolved rapidly over the last few years. Even as the world transitions to faster, more efficient modes of electronic payment, some suppliers today are hesitant to move away from traditional payment methods [1]. While businesses recognise the benefits of virtual card payments and invest in infrastructure to digitise fund transfers, they often deal with vendors who are neither willing nor equipped to accept card payments. Streamlining the payments process through card-based reimbursements has numerous advantages, but to convince suppliers to come on board, it is important to understand their concerns and address them effectively.  

Why Suppliers Don’t Accept Cards

There are many reasons why suppliers are wary of accepting card-based payments. Here are a few:

1.   The process of setting up and operating the payment acceptance mechanism is seen as laborious, since it involves reaching out to providers for payment processing, starting a merchant account to receive the funds and integrating these collected funds into the business operations account.  
2. Credit card payments are generally accompanied by processing fees which suppliers are reluctant to bear.  
3. It can take some time for the payment to be credited to the beneficiary’s account. Banks may hold funds until they have ensured that the sender won’t dispute the charge and reverse the transaction. 

New payment mechanisms are designed to overcome some of these barriers. Additionally, their advantages far outweigh their downsides. Instarem’s Bizpay is one such solution that optimises existing credit card lines – it enables businesses to utilise their unused corporate credit card limit to pay suppliers, without the latter having to incur costs or having to bear any other inconveniences. Adopting this system can be beneficial for both the business as well as the suppliers. However, the suppliers need to be assured of its positives.  

Why Suppliers Should Accept Cards

Card payments have built-in controls through which payments can be automated and the need for invoices can be eliminated. Funds can be transferred instantly and with ease, making it possible for buyers to operate on shorter payment terms and for suppliers, in turn, to boost their cash flow. Further, the payment is cashless, which is not just more hygienic, but also saves the time and effort needed for reconciliation through manual data entry, endorsing cheques and depositing them. Since virtual payments do not require bank account information, sensitive data remains more secure through this channel. And ultimately, the biggest incentive for suppliers is the impact card acceptance can have on their business. It is more convenient for buyers to work with card-accepting suppliers, so not accepting cards could result in missed sales opportunities for suppliers. Through card acceptance, suppliers can stay competitive, maintain healthy relationships with buyers and grow their business. [2] 

How You Can Benefit From Instarem BizPay

Instarem’s BizPay can help you make card payments even to non-card accepting suppliers, at no extra charge and without having to onboard them. Once a credit card is added as a payment source, all you need to do is type in the name of the beneficiary (business entity) for the funds to be transferred.  

Most companies have an existing corporate card system for travel and expenses, which remains largely unutilised. With Instarem BizPay, this unused credit limit can be converted into working capital, at 0% interest for up to 55 days* and can be used to pay not just suppliers, but also salaries, rent and utility bills. Our bundled pricing includes platform fees as well as FX charges which facilitates cross-border payments to international suppliers seamlessly and makes them more cost-effective.  

Moving to card-based payments has obvious benefits, especially for SMBs that experience a paucity of working capital on a regular basis. Both the buyer and supplier stand to gain from card-based solutions, in terms of enhanced cash flow, simplified transactions and ease of reconciliation.  

It is, therefore, essential to make suppliers aware of the upsides of transitioning from traditional methods to these advanced channels of accepting payments. An efficient and transparent platform such as Instarem BizPay makes a compelling case in favour of card payments and is more likely to win over suppliers’ acceptance.

To find out more about BizPay, visit

SG: https://www.instarem.com/en-sg/bizpay

AU: https://www.instarem.com/en-au/bizpay

*55 days are indicative for reference purposes only. The actual number of days may vary as per the terms and conditions of an individual’s card issuing bank.