Small Business Payment Solutions:
Business Cards
August 2008
Today’s Presenters:
Dee Moore is Vice President and Commercial Card Sales Manager
in BB&T’s Bankcard and Merchant Services division. Dee has
almost twenty years of banking industry experience, fifteen of which
have been in credit cards. Dee is a graduate of West Virginia State
University and the West Virginia School of Banking and she holds a
Certified Treasury Professional certification from the Association of
Financial Professionals.
John Yarley is a Senior Business Leader with Visa USA’s Small
Business Products Department. He has more than sixteen years of
broad-based experience in debit and credit card product
management and merchant processing, and has previously held
product management positions in a number of major U.S. banks.
John holds a Master’s of Business Administration degree from Ohio
State University
.
Agenda
Small Business: The Foundation of Our Economy
What Business Owners Tell Us
Visa Business Products and Services
How Businesses Pay Today
Core Product Features
•
Tracking Business Expenses – Online Reporting
•
Protections – Zero Liability, Liability Waiver and Visa
Protection
•
Purchase Savings
•
Other Enhancements
Case Study
Small Business: The Foundation
of Our Economy
Small businesses make up more than 99.7% of all
employers.
Small businesses create more than 50 percent of the
non-farm private gross domestic product (GDP).
The 22.9 million small businesses in the United States
are located in virtually every neighborhood.
Small businesses make up 97 percent of exporters and
produce 29 percent of all export value.
Small businesses with employees start up at a rate of
more than 500,000 per year.
Four years after start-up, half of all small businesses
with employees remain open.
Webinar Audience Question #1
The MOST critical need I am seeking to address with a business
payment solution is:
1.
Cash flow
2.
Vendor acceptance
3.
Rewards and purchase savings
4.
Flexible reporting
What Business Owners Tell Us
Small Business Owners are seeking compelling value propositions
from their Business Cards
Cash Flow SolutionsA comprehensive payment solution set to address Small Business cash flow needs – Business Check Card and Business Credit Cards
Coverage & Utility
More than 7.4 million Visa merchant outlets offer extensive coverage and utility to Small Business cardholders
Rewards & Purchasing Savings
Rewards Programs and Merchant Offers provide compelling rewards and purchase savings for Small Business Visa cardholders
Efficiency Tools
Online Reporting Tools give business owners the capability to:
a. review account statements for the past 18 months b. Receive email alerts to manage account
c. view an image of monthly paper statement d. download transaction information to financial software
Emotional Elements
Security features such as ‘Visa’s Zero Liability’ and card enhancements such as ‘Purchase Security and Extended Protection’
Coverage & Utility
Rewards & Purchasing Savings
Efficiency Tools
Emotional Elements
Cash flow Solutions
Rational Small Business Owner Benefits Emotional
Small Business Owner Engagement
Low
Hig
Visa Business Products and Services
Bank Online Reporting Tools
Web-based reporting solutions that allow expense monitoring and
streamline accounting Visa Rewards Rewards earned on everyday business purchases across payment products Merchant Offers Merchant discounts and special offers
in broad expense categories
Visa Business Credit Card
Provides convenience and a grace period
for routine business purchases Visa Business Check Card Provides Small Business Owners and their
authorized employees access to funds from
Small Business checking accounts Visa Business Line of Credit Provides access to short-term working
capital for cash flow fluctuations and
peace of mind Liability Waiver Protection from employee misuse Business Differentiators Payment Flexibility
Webinar Audience Question #2
How do you now pay for the majority of your business purchases?
1.
Check
2.
Credit Card
3.
Cash
4.
Debit Card
14% 23% 38% 39% 42% 46% 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other Debit/ATM Card **Bank DDA Cash *Non-Bank DDA GPC Cards Check
How Businesses Pay Today
Checks are the primary competitor to business cards within
small business wallets
14.2
$14,766
$291
7.8
$2,993
$77
3.6
$4,114
$300
5.6
$769
$36
4.0
$4,963
$300
7.9
$1,548
$65
4.0
$3,206
$197
Avg. # of Transactions Avg. Monthly Spending Median Ticket Size*Non-Bank DDA payments include those arranged directly with vendor or PayPal, or through other online bill payment services **Bank DDA payments include those arranged through the bank’s online bill payment service and those arranged with the bank offline Source: Visa Small Business Payment Panel 4Q’06-1Q’07
2002 2005 2010 (f)
Business Spending Growth Trends
Small business spending reached $4.7T in 2005, with an additional
$1T forecasted growth in the next 5 years
Core Small Business Non-Payroll Spending Growth
Source: Global Insight, Visa USA Product Development and Management, Visa USA Interchange Strategies
T&E Rent All Other Raw Materials and Inventory Maintenance, Repair, and Operations Core Business Services $80B $99B $125B $291B $366B $652B $1,348B $1,222B
$4.0T
$1,610B $1,338B $800B $420B $412B$4.7T
$5.7T
$1,969B $1,596B $918B $514B $586B e.g., Drywall e.g., Database Management e.g., Cleaning ServicesWebinar Audience Question #3
The ONE key feature I am looking for in a Business Payment
Solution is:
1.
Flexible reporting
2.
Security and protection
3.
Purchase savings and/or reward programs
4.
Low fees
Core Product Features: Tracking
Business Expenses
Quickly access individual account information online
Review account statements for the past 18 months
Benefit from same-day credit for payments made before 2 p.m. ET
Sign up for email alerts to help manage accounts
View an image of monthly paper statements
Core Product Features: Protections
Zero Liability:
9
No liability for fraudulent purchases; applies to your BB&T
Business Credit Card
Liability Waiver:
9
Protection from employee misuse up to $100,000* per
cardholder
Visa Protections:
9
Dispute resolution process
Core Product Features: Purchase
Savings
•
Discounts – online coupons
•
Suites of discounts are updated every six months
•
Choice Hotels
•
Car Rentals
•
Personal Computers
•
Wireless Products
•
Program Details
http://usa.visa.com/business/small_business/partner_advantage.jsp?it=fl|/|/VisaHome02.swf|ev_sbdisc_click&rand=285 9192Core Product Features: Enhancements
Auto Rental Collision Damage Waiver
9
Automatic coverage on rental vehicles for damage due to collision or theft
Purchase Security and Extended Protection
9
Purchase Security will replace, repair, or fully reimburse covered
cardholders up to a maximum of $10,000 in the event of theft or certain
types of damage
9
Extended Protection doubles the time period of the original manufacturer’s
written U.S. repair warranty up to one full year on warranties of 3 years or
less
Travel and Emergency Assistance
9
Coordination of cardholder’s medical, legal, and travel services while away
from home
9
Additional services offered: Medical Referral Assistance, Prescription
Assistance, Legal Referral Assistance, Emergency Ticket Replacement and
Emergency Translation Service
Luggage Reimbursement
9
Reimbursement for cardholders and families for the replacement cost of
checked or carry-on luggage and its contents
Business Card:
Case Study
Case Study – Client Profile
New business client looking for a NO COST payment solution
designed to utilize technology to streamline the business
procurement and travel expense process, while providing
added security, visibility and benefits to the business.
Focus on Travel, Food Services and Computer/Office
Case Study – Current Scenario
The business processes hundreds of checks and pages of
paper for employee reimbursement of petty cash and travel
expenses.
Purchase of fuel, local items and food services are paid by
check or on PO/store account.
Computer hardware/services/software, office supplies and
postage are paid by check and are limited to specific
providers that will accept check/PO payment.
Case Study – Product Solution
Benefits realized when using a Business Card as payment option:
Increased/extended cash flow
– business receives cash management benefits
not offered with checks. Multiple items are charged on the Business Card for a
consolidated company settlement each month. Business maintains a higher average
daily balance in its operating account to offset bank fees and is able to “sweep out”
funds to earn additional interest income.
Increased security and control
– business has greater control over monthly
expenses against its monthly budgeted amount. Business able to monitor purchasing
compliance and usage of contracted/preferred vendors – data used to consolidate
vendors and request vendor discounts.
Reduction of paperwork and check issuance
– business able to reduce
paper and check costs – including check stock and postage costs.
Rewards incentive
– business can participate in a no cost Business Rewards
program not offered with checks.
Case Study – Implementation
Client selected and implemented a Business Card program
in January 2008
$100,000 credit line
20 cards issued to key department managers and procurement/
traveling employees
In 5 months, the business program accumulated 620 transactions for
$103,000 in purchases.
Case Study – Immediate Benefits
Eliminates employee check reimbursement of petty cash and travel.
– Employees follow normal guidelines for petty cash and travel expenses, then pay with the
Business Card. Process is convenient for the employee; the business is able to monitor and track expenses; and Accounts Payable no longer issues multiple checks to employees for expense reimbursement.
Pay for fuel, local items and food services on the Business Card rather
than with checks or multiple cards.
– Provides the business added security layers – business is able to track expenses via an
online, real-time monitoring system. Reduces the number of checks written by Accounts Payable and streamlines paperwork. Plus, the business earns extended cash flow and Reward points.
Pay for computer hardware, services and software, office supplies and
postage using the Business Card, for convenience and flexibility.
– The business receives the best value for its dollar by being able to purchase locally, globally
and via the Internet. Direct debit can be set up as a clearing account where the business can review, approve and pay monthly expenses.
Case Study – Results
Reduction of checks by 620
Increased cash flow/float by $10,000 to $15,000 based on extension of
payment terms
Greater security and monitoring of business transaction data online
Convenience, tracking and accountability of business employee
management
Added travel benefits to the business – travel and emergency
assistance services, travel and accident insurance and auto rental
collision damage waiver insurance
Single payment to bank replaces multiple monthly payments to vendors
Accounts Payable can focus on expense analysis and other initiatives to
increase productivity/reduce spending
Case Study – Annual Savings
In 5 months, the business program accumulated 620 transactions for $103,000 in purchases.
Top 3 categories of card use include: Travel @ $26,000, Food Services @ $20,000, and
Computer @ $9,700.
Savings:
Reduction in check usage by 620, at a conservative cost of $10 (Treasury Studies have
determined the cost of issuing a check is $12). $6,200 in savings YTD.
Earnings:
Extended cash flow/float of $10,000 monthly. If invested short-term at 2% for 30 days for
5 months, added $83 to interest income.
Business Rewards of 103,000 points to be redeemed by the business.
Online/real time transaction data, with downloadable capability to the business accounting
software to better monitor budgets in real time and perform financial reporting/data analysis. Data exported electronically saving time for keying data into the accounting software.
Cost:
NONE!! This client selected a NO COST program, to include all tools and resources to manage a successful card program!
