When a customer wants to pay an invoice with a commercial card, accounts receivable (AR) teams face a familiar challenge: how to manage the cost of accepting the payment.
For many organizations, the answer is to surcharge the customer. The logic is simple: if accepting a commercial card creates a processing expense, pass that expense along to the buyer. A surcharge may recover a transaction-level cost, but it doesn't address the manual work, reconciliation challenges, operational costs or payment friction that can come with accepting commercial cards.
Instead of asking, "How can we recover the card processing fee?" AR teams should be asking, "How can we make the entire payment acceptance process more efficient and cost-effective?"
That's where straight-through processing with Boost comes in.
Hidden Costs of Card Acceptance
Surcharging focuses on one specific part of commercial card acceptance: the processing fee. But for AR departments, the true cost of accepting a payment extends well beyond the fee itself.
A virtual card payment requires an employee to extract card information from an email, manually enter payment details, process the transaction, review remittance information, match the payment to an invoice and reconcile the transaction. Those steps take time, create opportunities for errors, and expose employees to require sensitive payment information. A surcharge doesn't eliminate any of that work.
At Ewing Outdoor Supply, Boost’s automation helped the AR team reclaim significant time previously spent processing virtual cards. As one team member explained:
"We've seen over 2,000 cards run. Most of those cards take two to three minutes. That's virtually 5,000 minutes that I've saved people to reinvest into something else."
That is the type of opportunity that fee recovery alone doesn't address. The value of automation goes far beyond eliminating manual steps. It gives AR teams time back to focus on customer relationships, exceptions and the work that requires their expertise.
What If You Could Reduce the Cost Instead of Passing It Along?
Straight-through processing takes a different approach by automating the payment process end-to-end. At Ferguson, the combination of cost savings and automation Boost was able to provide has a measurable impact. The company achieved a 40% reduction in virtual card processing fees, while also reducing the burden on its credit team.
As Ferguson's team described it:
"We're achieving significantly reduced processing fees. And Boost takes a burden off our credit team on the front end of processing virtual cards. And we're not going backwards at the end of these transactions when the cash gets applied."
For AR teams, saving money on the front end only goes so far if payments still create manual work on the back end.
Commercial Card Acceptance Can Support Growth
It's also important to consider the value commercial card acceptance can provide to buyers. Commercial cards can give AP teams greater flexibility in managing payments and working capital. Making card payments more difficult or expensive can introduce friction into the buyer experience and potentially influence how customers choose to pay.
Research conducted by Visa found that 50% of surveyed merchants that did not accept card payments reported lost sales due to non-acceptance. Along with this, Merchants experienced an average uplift of 432 basis points in sales, thanks to commercial card acceptance.
How Straight-Through Processing Changes Commercial Card Acceptance
Straight-through processing automates virtual card payments that would traditionally require manual intervention. With Boost Intercept®, payment information is automatically intercepted and parsed in a secure environment, eliminating the need for employees to manually extract and enter card information. The payment can then move through an automated process with enhanced remittance data to support reconciliation.
For AR teams, that means:
Lower card acceptance costs
Boost can typically help suppliers save up to 40% on card acceptance costs, providing an alternative to simply passing those costs along through a surcharge.
Less manual work
Automating payment processing eliminates repetitive data entry and reduces the number of manual touchpoints required to process commercial card payments.
Less sensitive data handling
When employees no longer need to manually extract and enter card information, organizations can reduce employee exposure to sensitive payment data.
End-to-end automation
Payments are automatically processed and funds are deposited into your bank account along with enhanced remittance and reporting.
Move Beyond Fee Recovery With Boost Intercept®
Instead of asking: "How can we recover the card fee?"
Ask: "How can we reduce the cost and complexity of accepting this payment?"
That shift can open the door to improvements across payment processing, reconciliation, reporting, funding and operational efficiency, while helping preserve a seamless experience for buyers.
Fee recovery is a band-aid fix. Payment optimization addresses the underlying process. Boost Intercept® uses patented straight-through processing technology to automate commercial card payments from end to end. Reduce card acceptance costs, eliminate manual payment processing and streamline reconciliation with automated payment processing and enhanced remittance data.