Boost Intercept drives seven-figure savings for Ferguson

INDUSTRY BACKGROUND

The B2B payment industry is shifting, as more buyers and suppliers address high costs, automate manual payment processing, and adopt digital payment solutions. Virtual cards are quickly becoming the preferred method of payment for enterprise buyers because they are significantly more secure than other payment modalities and offer better control for procurement and AP organizations. As AR teams are challenged to accept a widening array of payment types, including virtual cards, they are looking for processing solutions that minimize costs, reduce manual workloads, increase security, and ultimately optimize cash flow.

THE CHALLENGE

Before working with Boost in 2022, Ferguson was exploring ways to enhance its payment processing experience. Among their priorities were reducing customer friction and managing the costs associated with diverse payment methods.

Ferguson was committed to addressing the increase in virtual commercial card payments, recognizing the need for a more efficient process to handle the broad spectrum of transaction sizes. The goal was to alleviate the delays caused by manual processing of authorization emails, which sometimes resulted in payments not being processed on the day of receipt.

Manually processing credit card authorizations and processing a constant stream of virtual card payments demanded a considerable amount of time and resources from the Ferguson credit team. With a significant number of payments arriving daily, and notable peaks in activity mid-month, the centralized credit operations team occasionally needed support from other departments to manage the workload and minimize delays.

In response, Ferguson explored third-party B2B payment solutions aimed at enhancing payment efficiency, lowering credit card processing fees, and ensuring seamless integration with their current systems without complicating their accounting processes. The ideal solution would also be marked by straightforward cooperation and a history of successful initial deployments, facilitating a smooth transition to a more automated payment framework with remittance data in formats that would not add any additional cash application accounting burdens.

PROOF POINTS

Mastercard has successfully migrated the vast majority of its payments to its commercial card platform. Mastercard now pays suppliers with its commercial card products via Boost in over 30 countries around the world.

Mastercard enjoys significant rebates and working capital generated by its card payment program.

Boost and Mastercard entered a strategic global partnership in 2021 to expand the use and acceptance of commercial cards around the world.

THE SOLUTION

Mastercard enlisted Boost to simplify its payments to suppliers via Boost’s proprietary straight-through processing (STP) platform, Boost Intercept®, thereby allowing Mastercard to automate supplier onboarding, payment processing and remittance reporting.

Boost Intercept digitizes Mastercard’s commercial card payments so that payments are automatically settled with the supplier’s depository banks while payment notifications and detailed remittance reports are sent to suppliers in their preferred file format. By integrating Boost Intercept with Mastercard’s virtual card platform, In Control®, Boost was able to convert the e-mail-based output from In Control into STP payments across the globe using locally issued card products with a single push of a button.

“Our customers can pay us into our bank-managed lockbox, by wire, cash, or traditional credit card. Boost has helped by automating acceptance of a surging payment method, the virtual credit card - a process that was previously very manual.”

Daniel HenricksRegional Credit Manager, Ferguson

THE SOLUTION

Ferguson enlisted Boost for a more efficient and streamlined payment process. By directing virtual card payments directly to Boost Intercept, Ferguson was able to convert e-mail based notifications to straight-through processing (STP) payments. The implementation of Boost Intercept’s fully passive process brought about a transformative change for Ferguson by automatically settling all commercial card payments directly to Ferguson’s depository account while payment notifications and detailed remittance reports are sent to Ferguson’s ERP in their preferred file format. This technology allowed Ferguson to remove any manual intervention and created end-to-end payment and data automation, ensuring timely payments and reduced operational costs.

Boost also empowered Ferguson to optimize their cost of acceptance by defaulting to the optimal interchange clearing rates, thereby lowering the overall cost. For Ferguson, this strategic approach further enhanced their overall payment efficiency and solidified the success of their automated payment system.

“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.”

Brenda CrowderAssistant Treasurer, Ferguson

Project Achievements

SAVINGS ON PROCESSING FEES

Ferguson has achieved a 40% reduction in processing fees on virtual cards resulting in significant cost savings, especially considering their high-ticket transactions. Additionally, Ferguson estimates the company saved million of dollars in the first year by using Boost to automate huge volumes of card payments, while receiving the competitive proprietary rate that Boost provides compared to other such solutions.

CASH APPLICATION

When Ferguson identified an opportunity to enhance the timeliness of updating customer account balances in their ERP system, Boost proactively collaborated to tailor the remittance delivery process. By providing remittances in an Electronic Data Interchange (EDI) format compatible with the cash application software at Ferguson, Boost facilitated seamless integration, enabling their shared services team to uphold their high service standards.

DECREASED LABOR FOR CREDIT TEAMS

By having Boost streamline the process of processing virtual card payments, this saved the Ferguson credit team significant daily time and employee resources, including labor savings of approximately three to four full-time employees on the regional credit team. These employees were then reassigned to handle other core functions, such as making customer service calls to the credit team, helping reduce the company’s carrying costs, and identifying potential credit risks before they become problematic.

PAYMENT EFFICIENCIES AND SCALABILITY

Ferguson has achieved significant growth in total dollar volume of payments processed through Boost month-over-month, and it plans to continue rolling out the solution across its diverse customer base. By increasing transaction volume and processing more payments through Boost, Ferguson achieves economies of scale that drive major cost savings and operational efficiencies. The company is looking to expand its use of Boost to other card types and explore opportunities for further payment automation in the future.

About Boost

Boost Payment Solutions is the global leader in B2B payments with a technology platform that is purpose-built to meet the complex demands of today's commercial trading partners. Our proprietary technology solutions bridge the needs of buyers and suppliers around the world, eliminating friction and delivering process efficiency, payment security, data insights and revenue optimization. Boost was founded in 2009 and operates in 45+ countries. Boost Intercept®, our patented Straight Through Processing (STP) platform, eliminates manual workflows with end-to-end payment and data automation. Breaking the mold of traditional rigid credit card pricing constructs, Dynamic Boost® offers buyers and suppliers payment flexibility based on business rules that fit their mutual needs. The Boost 100® platform brings together all the solutions and services that large enterprises need to enable up to 100%of their AP spend on their commercial card.

Boost Intercept^® drives major operational efficiency and seven-figure savings at Ferguson

INDUSTRY BACKGROUND

AT A GLANCE

THE CHALLENGE

THE SOLUTION