Forrester Report Reveals Positive Impact of Commercial Credit Processing

Recently, Forrester released an independent study, commissioned by Visa, on The Total Economic Impact of Commercial Credit Card Acceptance. The study, a double-blind survey of 153 decision-makers from merchants with experience accepting commercial credit cards, aimed to reveal the potential return on investment (ROI) companies may realize from commercial credit card acceptance for B2B transactions.

Survey respondents included CFOs (43%), senior directors (29%), VPs (14%), and senior managers (11%). Respondents are heavily weighted in industrial manufacturing (28%), healthcare (22%), retail/wholesale/distribution (17%), construction/homebuilding (15%), and technology (14%).

This study found that accepting commercial credit cards delivers a positive economic impact of 357 basis points of net benefits per transaction over a three-year period. It also generates an impressive ROI after just three years of 113%. This means that the credit card fees and ongoing program costs were significantly outweighed by the benefits, which include revenue, increased receivables, decreased days sales outstanding, and process improvements.

Companies that accept credit cards are 33% happier based on Net Promoter Scores, and purchases completed with credit cards are more efficient to manage. Some of the more tangible benefits of accepting payment by credit card, as identified in the study, include:

• 68% of businesses experienced improved outcomes such as increased revenues after they began accepting payments by credit card, and 66% experienced improvements in process efficiencies
• 52% of businesses recognized cost savings
• 56% of businesses improved cash flow by increasing the collection of outstanding bad debt
• 45% of businesses experienced reduced fraud

The most important factors that led the surveyed companies to begin accepting commercial credit cards were:

• Payment guarantees
• Improved days sales outstanding (DSO)
• Attractive cost per transaction to receive each payment
• Enhanced security of the incoming payment
• Desire for more effective use of accounts receivable team member labor and time

The most prevalent alternative to credit card transactions were automated clearing house (ACH) payments and checks. However, these created many difficulties for accounts receivable and customers, including time-consuming and costly processes for payment reconciliation, exception handling, and debt collection. Additionally, customers want to pay with credit cards for security and benefits and can be frustrated by a lack of credit card acceptance by some merchants. Remote work during the pandemic also made it more difficult for companies to pay bills with checks, rather than simply giving employees credit cards they can use at their home offices.

Commercial credit processing provides quick, efficient payment processing that streamlines accounts receivable, reduces business costs, eliminates unnecessary work, appeals to customers, and improves cash flow. If you would like to learn more about what commercial credit card processing can do for your business, reach out to a NET1 payment processing representative for more information on NET1 integrated credit and debit card payment processing.

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