Commercial Cards Key Topic for B2B

When businesses began to use commercial cards, executives utilized the payment tool in a limited capacity. It was a piece of plastic that could be used by employees for small business expenses like client dinners or travel costs. Today, however, the use of commercial cards has expanded and has become a topic of conversation by executives who are trying to optimize it to improve supplier payment practices.

According to PYMNTS, the cost and administrative headaches that came with this type of card acceptance kept it at arm’s length for corporations who could not see the advantages. But shifting priorities among buyers and suppliers has pushed the opportunity for commercial cards to meet changing cash management needs in today’s B2B environments.

Advantages That Come with Corporate Cards

1. Ability to Guarantee Funds

Among the largest benefits of commercial cards is their ability to guarantee funds for a supplier once a payment has been submitted by the buyer and authorized. This is key for vendors who struggle to keep their business capital fluid while they are waiting for payments from their buyers. Funds may not actually be released by a buyer for 30, 60 or even 90 days after the payment has been made and the time lag puts vendors at risk. With commercial cards, the lack of predictability is eased for vendors.

2. Cards Supply Crucial Data

With credit cards come data and data is a hot commodity in the B2B marketplace today. Both buyers and suppliers are looking for information that can help them better understand and improve supply transactions. When using a corporate card, these types of data sets are limitless because of the information that can be sent with each transaction.

3. Shows the Drawbacks of Checks

While paper checks have a perceived low cost and ability to include infinite remittance details, that data comes in the form of paper. That format is very cumbersome for suppliers to bring handwritten data into their systems. Because of that, suppliers are becoming more aware of the hidden costs like manual data entry and lockbox services that comes with accepting paper checks. Using commercials cards alleviates many of the issues that checks create for businesses.

Commercial Cards Changing Mindsets

And while commercial cards won’t work for every industry’s B2B payment needs, a significant mindset shift among buyers and suppliers continues to drive adoption across industries and borders.

As stated in PYMNTS, “a combination of many factors contributes to this mindset shift of buyers and suppliers to think of cards as not something that’s a piece of plastic, but as a true treasury product that allows them to optimize the manner in which they pay and get paid as well as manage their enterprise.”

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