Overcome the obstacles to using the commercial card

Using commercial cards for business-to-business (B2B) payments can offer a host of benefits, ranging from faster, more profitable payments to securing the supply chain, improving cash flow and fund. working capital and providing an additional source of income. through discounts for public sector organizations.

However, while a growing number of organizations are aware of these benefits, some face a number of obstacles that can frustratingly prevent them from unlocking the added value that commercial cards can bring.

Obstacles to the use of the commercial card

Some of the most common perceived challenges when it comes to using commercial cards to pay vendors include:

  • Process change – the idea of ​​changing the way payments are typically made and rolling out new processes can seem daunting and time consuming for buyers and suppliers.
  • Loss of Control – for buyers, there may be concerns about losing control of when payments are made; the effects that could have on their own working capital and their ability to meet the obligations of the prompt payment code.
  • Supplier acceptance – some suppliers, especially those who do not have dealings with retailers or customers, may be reluctant to accept card payments due to the initial cost of setting up card acceptance and / or ongoing costs associated with card transactions.
  • Transaction Size – Traditionally, commercial cards are considered to have a “cap” on the size of the transaction.

Overcome the challenges

Organizations have faced many of these challenges for years, and it’s fair to say that the payments industry hasn’t really delivered a solution so far. But that is changing rapidly. The pandemic means the way organizations view payments has evolved at an accelerating pace and the industry must take action to keep pace.

As an Issuer, we are taking proactive steps to rethink our payment solutions so that they provide a greater opportunity for our purchasing clients to use and reap card payments as part of their combination of transactions. the fruits.

Over the past few months, we have rolled out a number of products aimed at making commercial cards more accessible, from both a buyer’s and a supplier’s perspective. We have also adapted card payments to meet the needs of the B2B space by aligning them with electronic funds transfers, but with a few additional benefits.

For example, integrated payment solutions allow the supplier to accept payment as soon as they have been authorized to do so, and offer better control in terms of spending as well as fast and efficient purchasing support without the need cumbersome approval process. or paperwork.

Likewise, Straight Through Processing (STP) solutions aim to overcome many obstacles in the use of cards. By allowing you to pay your invoices directly to your supplier’s bank account and to settle all your payments by a monthly direct debit. STP can save time by making payment automation easier and easier to reconcile, while protecting your working capital.

Just the start

These developments are just the start. We have embarked on a roadmap of change over the coming months and years that aims to solve customer issues, overcome barriers to B2B commercial card use, and create a smoother transaction landscape. for buyers and suppliers.

All of our solutions are built and designed in a way that fits into the modern technology landscape and minimizes friction for our customers, for example by making more application programming interfaces (APIs) available to connect.

We are also placing more emphasis on truly understanding our customers’ supplier footprints and using that information to identify and recommend appropriate solutions.

Lloyds Bank Help and Support

The nature and magnitude of business B2B payment challenges can vary widely and require very different solutions. At Lloyds Bank, we want to know your individual situation – whether it’s navigating a complex payments landscape or wanting to implement a simple B2B payment system – so that we can help you identify the right solution for you. your needs and help you unlock the added value Commercial Cards can bring.

To see how we can meet your payment needs, visit lloydsbank.com/cardsolutions

James Sykes is Head of Commercial Cards and David Legg is Head of Corporate Card Products at Lloyds Bank

Lloyds Bank plc is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.

This is commercial content for The MJ

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