Are you using your bank’s treasury services? Should you consider a bank-neutral payment platform instead?

Mon, Sep 17, 2018 @ 08:08 AM

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If you are using your bank’s treasury services for payment processing, you are reaping the benefits of having outsourced the process.  At the same time, you are tied to that one bank...meaning you are required to hold the cash to fulfill payments in their accounts, therefore, your bank portfolio may not be as diverse. You may not be aware that there is a better way to issue payments. 

Using a payment platform that is bank-neutral – meaning it can work with any bank – is a better option. 

Payment Platform - Bank Neutral Payment Platform - Payment Processing

Here’s why: 

First, a payment platform is not a bank.  It doesn't take control of any funds and doesn't require you to issue your payments via certain accounts.  It doesn't require you to keep your money anywhere.  The best platforms allow you to have as many banks and bank accounts as you like to issue your payables. 

Next, your bank isn’t going to do you any favors to help keep your fees down.  They are in the money-making business after all.  Alternatively, a good payment automation platform will help you streamline all of your processes and consolidate files, ultimately, helping you to reduce fees. 

Now if you're a mid-sized company, your bank may not even offer you the services they offer to their largest depositors.  Instead, they force you into using their systems, their tools and, in addition, they will demand that you program your payment file to meet their file specifications.  That’s not what you need.  You shouldn't have to use different processes for different payment modes either.  A good payment technology will allow you to use your existing accounting or ERP and streamline payments all of your payments in a single payment file directly into your bank or even multiple banks. 

Banks will not help you maximize your rebates on your virtual card spend.  They'll keep those rebates and pay them out only when you hit certain minimum or targets they set and they'll only pay them quarterly or annually.  On top of this, typically, banks focus on enrolling only the largest suppliers in electronic payments – meaning only the suppliers that receive the largest payments or those that they already have in their system will receive electronic payments.  Payment Automation platforms will campaign the majority of your vendors and suppliers which results in higher electronic payment adoption and, as a result, more cash back to you.

Banks don’t work hard to ensure supplier acceptance and don't communicate to ensure payments that are issued are cleared. A good payment provider will communicate repeatedly to ensure issued cards are cleared and that the vendors receive all remittance information for 100% of your payments to ensure that they are settled. 

Banks may even want to control your payments – meaning you send them a file and they determine the payment modality.  Some payment platforms do the same thing.  Be wary...this can cause vendor relationship problems and reconciliation problems. 

All in all, Bank partnerships are wonderful but they're clearly not ideal as payment solutions.  Seek a solution that provides you with 100% of visibility into your payments because you control everything. Further, look for a partner who is payment focused, who wants to work with you on your terms, manages the program the way you want it managed and has a passion for customer service.  And, as a final step in the evaluation process, ask them for their client satisfaction survey results to ensure you pick the best provider.  

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