The Future Beyond Credit Card Fees

Dec 6, 2022 by Sage Thee

Here at Paystand, we believe that the best possible option for businesses is reducing credit card transactions.

You may be nervous about or don’t even know how to get off credit card payments. We’ll go through and answer a series of questions, and by the end, you’ll feel like we do.

Unnecessarily high credit card processing fees frequently undercut B2B profits. For any business, these fees can drastically dig into your profit margins, which can be damaging in highly competitive markets. Add in the complexities of a down economy (inflation, interruptions in the global supply chain, the Great Resignation, and increased salaries to attract top-performing talent), and it’s no wonder profit margins are diving

Credit cards were once the hottest innovation, replacing outdated payment methods like paper checks and cash. But now? It’s time to move beyond them.

We’ve more or less accepted credit card fees as a necessary evil of running a business, but what if there was a better way?

Credit cards are a bit of a vicious cycle — the more you use them, the more you pay in processing fees. If you push for credit card payments as you grow, your credit card volume will grow, too — which means the processing fees will also increase. Reconciliation headaches will worsen, making it challenging to scale as your business grows.

With a low-cost subscription model, companies know their costs upfront. When transaction volume climbs, the low monthly cost remains the same, and AR costs decline. As sales increase, companies can reap the rewards of higher revenues — rather than recalculate the costs of their higher fees.

Credit cards meet their match: Introducing Payments-as-a-Service (PaaS)

There’s no reason businesses should lose a percentage of their every sale to transaction and convenience fees, so we built a payment infrastructure that eliminates them. The Paystand Bank Network provides digital payment options such as real-time fund-verified transfers, e-checks, and credit cards, all for a low monthly fee — instead of forcing businesses to rely on punitive transaction costs to collect revenue.

Payments-as-a-Service (PaaS) upends the traditional fee-based payment model, utilizing a subscription-based software model instead. That means you pay a flat monthly rate to use PaaS software instead of losing a cut of every transaction to processing and transaction fees. Think Netflix: you get access to hundreds of shows and movies for a flat monthly rate rather than paying for them individually.

Now apply that same concept to payments, and you get PaaS.

Thirty-six hours of payment reconciliation every month? How about zero?

Spending hundreds of hours manually reconciling payments is a massive drain on time, brainpower, and resources. For instance, how do you apply or pass the fee? How would you reconcile each transaction to each fee when your credit card statement doesn’t break down by invoice number?

Accounting departments spend 36 hours manually reconciling payments every month. If there are any manual entry errors, discrepancies, or other issues, that time increases drastically.

In today’s fast-moving, digital world, there’s no reason you need to spend eighteen days out of your year reconciling payments and transaction fees when software and alternative payment methods are available to mitigate that burden.

No business is best served by investing its staff’s valuable time in unimaginative, repetitive work. By adopting B2B payment automation technology and limiting the amount of credit card transactions you process, you can cut time to close in half.

No trying to tie fees back to an invoice + no credit card statement to reconcile = less work during month-end close.

Say goodbye to manual cash application and reconciliation. Paystand automatically performs the cash application for each payment, uploading deposit reports when funds are sent to the bank. We streamline the entire payment process, from invoice creation to reconciliation, cutting closing time in half and freeing your team for more high-level, strategic tasks (or for some much-deserved R&R).

It’s time to move beyond traditional B2B payment methods

Paystand helps companies eliminate transaction costs while providing solutions like automation, payment acceleration, blockchain-based Assurety, and multiple payment methods for a customized payment experience.

Our Paystand Bank Network, Least Cost Routing Technology, and Payer Incentives module enable you to realize several key benefits:

  • Accelerate cash flow to the business by offering a fully digital payment process.
  • Negate labor costs while increasing speed and efficiency with automation.
  • Decrease manual entry by 99%.
  • Reduce DSO by 20-80%.
  • Faster time to cash by 50-75%.
  • Painless reconciliation.

Snag your free copy of our ebook to learn more about B2B payments' future and why ditching traditional payment methods is the best solution for your business.