In today’s digital world your company can choose from a variety of electronic payment automation platforms and election payment services.
Let’s examine how electronic payments can not only save money and improve efficiency, but how they can add to your bottom line.
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Types of Electronic Payment Automation
When it comes to business-to-business electronic payments there are several options available including ePayment by check, ePayment by ACH, ePayment by wire transfer, and ePayment by virtual credit card.
With CoreIntegrator Payment Automation via OnPay Solutions you can pay using any combination of these payment automation services.
CoreIntegrator’s AP automation solutions allow all of these ePayment options to be seamlessly integrated into any accounting or ERP system regardless of system limitations.
So which is the best form of electronic payment automation to maximize the return to your company?
Let’s look at the options to help you decide.
Virtual Credit Card Electronic Payments
With the advent of virtual card payment technologies it’s not only possible to slash the time and costs of paying bills, but you can actually monetize bill payment. vCards allow you to turn AP processing into a profit center.
Also called single-issue credit card numbers or vCards, virtual credit cards are the safest way to pay vendors. And virtual credit cards are a form of electronic payment automation that cost you nothing.
V-Cards are tied to a specific vendor, invoice or set of invoices, and dollar amount. You use a different V-card for each specific transaction. The card number immediately becomes invalid after use – providing your business account an extra level of security and fraud protection.
Use virtual credit cards for payment automation and you’ll save paper, time, money, and provide added security for your payments.
And best of all, your company will earn cash rebates for each transaction contributing real dollars to the bottom line.
ACH Electronic Payments
ACH stands for Automated Clearing House, which is a network that coordinates electronic payments and automated money transfers.
It’s a way to move money between banks without using paper checks, wire transfers, credit card networks, or cash.
The ACH system is designed to process batches of payments containing numerous transactions.
One of the biggest advantages of ACH is low processing fees – as low as $0.45 per transaction.
Plus, settlement time for an ACH is shorter than checks. An ACH settlement takes three to four business days. A check can take five to six business days. Or more if it gets caught up in slow moving mail.
Making ACH payments does require the collection of a vendor’s bank account number and routing number. But it provides a full electronic audit trail with step by step documented history of the transaction.
ACH is a proven form of ePayment. According to MasterCard’s analysis, 70% of companies are satisfied with using ACH for B2B payments.
Wire Transfer Electronic Payments
A wire transfer is a global payment system for electronic payment automation. You use them to transfer funds from one bank or financial institution to another.
Banks do not physically transfer money when conducting a wire transfer. Instead, they pass information about the recipient, the bank receiving account number, and the amount transferred.
First, the sender of a wire transfer pays for the transaction upfront at his bank. After that, the sending bank sends a message to the recipient’s bank with payment instructions through a secure system, such as Fedwire or SWIFT.
The recipient’s bank receives all the necessary information from the initiating bank and deposits its own reserve funds into the correct account. Then the two banking institutions settle the payment on the back end (after the money has already been deposited).
Wire transfers are relatively fast and secure, but they are relatively expensive ranging from $3.50 up to $45 per transfer.
Wire transfers as a form of ePayment really only make sense for invoices above virtual credit card or ACH limits.
The point of electronic payment automation is to move away from paper checks.
But sometimes a paper check is the only payment a vendor will accept.
So CoreIntegrator Payment Automation via OnPay Solutions provides an option to automate paper checks. You can print and mail paper checks from a secure off-site printing facility, or locally printed by your AP staff.
While the least ideal form of ePayment, retaining the ability to automate pay by paper check provides at least some gain in efficiency. The cost starts at $1.30 per check – still far cheaper than the benchmark cost of $5.14 per check – and the cost goes down as volume goes up.
Our Recommendation for Forms of Electronic Payment Automation
CoreIntegrator Payment Automation via OnPay Solutions provides four options to make ePayments that reduce cost and while providing secure automated payments.
We recommend paying as many invoices as possible with virtual credit cards. They are the safest form of payment and they are an electronic payment that earns your company cash. Why not make money by paying your invoices!?
For vendors who won’t accept virtual credit cards, use ACH as a backup form of payment. And automated, outsourced paper checks for vendors who will only accept old school payments. And use wire transfers for large invoice amounts.
Bottom Line – Choosing the Best Electronic Payment Automation for Your Company
Cutting a paper check can add an extra 5-7 days for delivery and posting of the check. And it costs over $5 on average.
You can start saving time and money by moving to ePayments and choosing the right form of electronic payments for your company!