The Hidden Cost of B2B Payments

Hilary Smith

September 25, 2020

The average American small-to-medium-sized business pays more than $272 every month in transaction fees for payments to their vendors.

Over the course of a year, that adds up - fast. Businesses are paying upwards of $3,000 in transaction fees, on top of what they owe to vendors on the receiving end.

The business owners and finance team leaders we work with say using automation to issue checks and ACH payments has taken a massive amount of work off their plate and reduced internal costs by 30%.

But, they've been able to realize the most value when they cut transaction fees out altogether and switch to Roger's DirectPay option.

Let's talk about why.

Still paying by Check?

We'll tackle checks first.

According to the Federal Reserve, check payments decreased by $3.9 trillion in amounts paid between 2015 and 2018.

Checks are on the decline because they are expensive. They cost you money to print, write and mail. They cost you time. They cost your vendor time.

It's a flawed system - especially if you have to hire an extra person, like an accounts payable clerk, just to handle check payments.

Plus, checks are easily lost. You could be spending extra time reissuing checks, not to mention additional fees to issue them.

Making payments by ACH?

ACH is less time-consuming and reduces the drain on internal resources. But, each payment carries a transaction fee. If you have 100 payments to make every month, it's still $50 every month to send ACH payments.

Plus, ACH payments aren't fast. They take an average of 3-5 days to land in a vendor's account, which can put a strain on relationships with vendors.

How direct, no-fee B2B payments work

Roger already automates the process of sending checks and ACH payments for you.

You don't need to lick any envelopes or turn to your bank account to issue a payment. That's a job for Roger's automated payments platform.

What we're trying to do (and pardon the check pun) is keep pushing the envelope and guiding the organizations we work with toward innovation.

We incorporated virtual credit card payments into our payments platform earlier this year. It was one of the most sought-after payment options from the SMBs and accounting firms Roger works with.

We call our virtual card program DirectPay.

DirectPay is an instant, no-fee payment option.

As long as your vendors can accept a credit card payment, you can pay them with DirectPay. All you need is their accounts receivable email to get started. In order for the payment to be made instantly, the vendor also needs to white label Roger's email.

What is DirectPay?

DirectPay payments are virtual credit cards.

These payments are sent securely via Roger's banking partner and are issued by Mastercard.

DirectPay payments are direct, free, and arrive the same day. With this payment method there’s a one-time use virtual credit card issued for each payment. Those one-time use virtual credit cards do not expose any personal and bank account information, which means the payer is not exposed to theft or fraud. Plus, each transaction can be reversed easily, without administrative overhead - unlike the high cost of cancelling and re-issuing checks.

But, what about the vendors who want checks?

You'd be surprised how many vendors change their mind when they hear about an instant payment option.

Checks add to the administrative overhead for vendors. They are required to handle them and cash them - both of which require time and energy that takes away from their core business.

And, the old adage is true. Time really is money. As the economy fluctuates, there is value in having money in hand. With a check, vendors may end up waiting a week for the check to arrive in their mailbox. Then, it may not end up in their bank account for another month depending on the savviness of their accounts receivable process.

We've found a distinct pattern across our Roger's DirectPay users. Their vendors, even if they accepted check or ACH payments, are open to accepting DirectPay if they have the ability to do so.

Now that you know...

Making check and ACH payments is costing you  $3,000 - or much more.

This is money you can invest back into running your business, rewarding employees and creating a more sustainable, scalable operation.

If you're running a business, start paying (and saving) with an instant, no-fee option today.

Get Started Today


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