What to consider when building a stronger virtual card program

by Robert Dindak - Vice President, Regional Manager

It’s common these days for businesses to pay their suppliers using a virtual credit card through an accounts payable (AP) program - an alternative to check and wire payments that helps companies earn a portion of revenue, or rebate, on each processed transaction. Not only do virtual card payments help reduce the number of checks a business writes per month, they turn a historically focused “payments out” department into a revenue generator. Revenue that hits an organization’s bottom line. Even the time savings employees gain add up through the reduction of manual tasks like signing, mailing, and printing checks.

So, what’s not to love?

Well, it may be the supplier enrollment process for some. One of the driving factors behind a successful virtual card program is the number of suppliers you enroll to accept virtual credit card payments. A business with the foresight to ask new vendors if they are willing to accept card payments makes an AP program sustainable in the long run. A string of vendor rejections, or the backing out of high-profile vendors, leaves gaps in a virtual card program that are tough to fill.

Like nurturing a garden, a virtual card program requires dedicated enrollment to ensure growth is constant. What happens if one of your top suppliers mandates they will only accept ACH payment from now on? When that happens, you may not always have another large supplier to fill the void. Without allocating more resources to call vendors who have yet to accept card payments, you’re left with a withering program. Program stagnation is even worse when your AP program provider has vowed to do all the heavy lifting for you, and promised to contact suppliers on your behalf, only to drop all efforts after the first year. We’ve heard it from customers time and time again – after the first-year supplier registration initiative, their previous AP program provider stopped all efforts to enroll new vendors and left them to handle future on boarding themselves.

This is what you need to consider when evaluating ways to strengthen your virtual card program.

If your supplier enrollment has slowed down significantly (or has even come to a halt), it may be time to look into a “complementary AP card program.” The concept is simple – keep your existing virtual card program while concurrently running a separate program with a different provider. You’ll want a new provider whose strength is in the supplier enrollment process to help take the load off your staff. A new provider who agrees to continue to enroll your vendors throughout the life of your virtual card program. That means, any new suppliers are captured from the start; continuously nourishing your program and earning you additional revenue (revenue left on the table by your primary AP program provider). And, it’s beneficial to find a new provider willing to contact your smaller vendors. Your primary provider may see those smaller suppliers as inconsequential but capturing enough of them may even lead to your complementary program outpacing your primary one.

We get it. In fact, we see it a lot with clients who hire us as their complementary program provider.

Program stagnation is a real issue many businesses face with virtual card programs becoming the norm. If you’re seeing any red flags with your current provider, it’s a good time to assess what else is out there.

Adopting a complementary program to capture funds that have been left on the table shouldn’t be daunting. We’ve put together some questions to ask other providers to ensure you’re finding a provider who can meet your enrollment needs.

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See also:

Seizing the benefits of strong supplier relationships
How to take advantage of early payment discounts