In part I of my “Card Acceptance Matters” blog article, I discussed the high-level results of research conducted by MasterCard and Kaiser Associates, and the finding that card acceptance can lead to increased purchasing volumes per customer. In this article,
we’ll take a look at how card acceptance can lead to greater revenue consistency.
Paying suppliers with cards, whether a traditional purchasing card or an automated ePayables solution can help to streamline the purchasing process for buyers. This is due in part to the removal of multiple manual processes inherent to other purchasing
and payment methods, e.g. eliminating for purchase orders or the need to print and mail a check. Data from the study indicated that this streamlining of the purchase and payment process encourages Buyers to purchase more frequently. 57% of respondents indicated
that they would be “likely” or “very likely” to increase ordering frequency with a Supplier who accepts cards versus a non-accepting Supplier.
Increases in ordering frequency - even if total purchasing volume remains constant – benefits the timing of cash flows to the Supplier. Receiving cash more consistently with more frequent purchasing allows Suppliers to reduce swings in working capital.
This “smoothing” of revenues resulting from card acceptance can potentially positively impact Supplier cash flow.
In my next article, I’ll discuss a third benefit from card acceptance. Please let us know your thoughts!