Stop Being Your Customer’s Bank: Smarter B2B Payment Strategies That Improve Cash Flow

Welcome to the Biz to Biz Podcast, your number one source for all business news. You're now watching B2B Vault, the Biz to Biz Podcast hosted by Allen Kopelman, powered by Nationwide Payment Systems, the number one solution for payment processing. Hey everybody, welcome to today's episode of B2B Vault, the Biz to Biz Podcast sponsored by Nationwide Payment Systems and our new NPS1 gateway and smart invoicing tool. For more information, visit our website nationwidepaymentsystems.com. And today, my special guest on the podcast for his third appearance, Roger McNamara of Visa. So it's very nice to have Visa. I wanted you to know, Roger, I have invited MasterCard and American Express and Discover— no takers.

No takers. Wow.

And I'm happy that I get to have Visa appear on my— some representative of Visa, Roger, who's the director of B2B payments at Visa, to come and appear on B2B Vault. And we can have a really great discussion today. We've had two other ones about B2B payments, and I think there's a lot for business owners to digest and understand about B2B payments. So, and I'll preface this also, you know, I know Roger for probably close to 30 years. Because a long time ago he worked for Amex and he walked in my restaurant before I was in the payments business, said, you need to take American Express, chef. Yeah, we've— then we ran into each other at a payments conference. And so we have a long relationship with knowing each other over a period of time. So Roger, introduce yourself to the audience.

Well, Allen, thank you. I can't believe this is my third visit to the B2B Vault to talk about B2B payments. Yes, I am Roger McNamara. I am the Director of B2B Payments at Visa. Been in the business a long time. Allen, you don't look a day over 30, but I do. And I've been at this for a long, long time. About $1 trillion in sales, both business-to-consumer and B2B. You know, I would say my forte is around the economics of commercial card acceptance and B2B acceptance now. But yeah, a lot of, a lot of mileage on the, on the thread here. So happy to chat with you today and, and impart some dialogue with you and your listeners.

So what's the picture behind you?

The picture behind me, my youngest son. I had two hockey players. Kind of odd. Lots of people who know me know I'm very passionate about the sport of hockey, but two sons my wife and I had, and one of them had the joy of being able to be a dual citizen between the US and Ireland, and he played for Ireland a couple of years ago in really the lower leagues of the World Cup and won a gold medal. So that photo I think that you see over my shoulder there is as he was playing on that team.

Okay, awesome. That's really cool.

Uh, hockey in Florida doesn't really add up, does it, Allen?

No, listen, I know a few other kids down here that played, you know, played hockey at a high level. So yeah, it's not, it's not unusual. So when we do, let's dive into a couple of things here with, with B2B. One of them, we always talk about the time value of money, and I think a lot of business owners, you know, still you know, struggle with the idea of, okay, I've started this business, I'm selling whatever— could be cups, it could be whatever, cereal, whatever it is that you're selling— and then you're negotiating with your clientele about terms. And, you know, I try to tell new business owners all the time, you don't want— you don't want to be the bank. For your customers. They already have a bank and they have a credit card and let them float the money. So what are your thoughts on that whole deal?

Yeah, I mean, listen, you're a disciple, you get it. So having come from the B2C world many years ago, the instant nature of a B2C transaction is what kind of clouds a lot of acceptance in the B2B space today. And what do I mean by that? You know, like, if we go to Publix today, our local supermarket down here in Florida, we walk in and we make a transaction. It's instant. I wheel my basket around the supermarket. I fill it with goods. I come to the checkout. I spend and I pay, and the transaction is concluded. However, in B2B, there is a difference, and that difference is that that buyer receives term from a supplier. So I'm buying widgets or cups as you identified. And typically, prior to the advent of plastic in the payment space in B2B, buyers received term and then settled with check and very inexpensive payment cost vehicles in the past. And then over time, cards started to be instituted as a method of payment. However, terms still remained and suppliers never adjusted their payment policies to account for the incremental cost associated with accepting a card. So think about it this way. I was visiting a large household name up in the Midwest a couple of weeks ago, and I was shocked to find out that they, you know, are large card acceptor, but they offer net 30-day term to their buyers, and most of their buyers exceed that and go to 45 or even 60 days. And in cases they allow people to come in and use card at day 60. Well, let's think about the economics of that for a second. That supplier is now financing that receivable for 60 days. You said it, Allen Kopelman. They're acting like a bank for that buyer. And now add on top of that that they have to pay the transaction cost for processing a card at net 60. So that's kind of like getting punched in the head twice. Act as the bank, finance the receivable, and then the buyer shows up and says they want to use card. And the kind of retort I get from businesses is a strange one. They say, well, you know, if I didn't take that payment, then I wouldn't get paid. And my actual response to most businesses: listen, you can't be part of the problem, you have to be part of the solution. And the solution is you have to set payment policies according to the cost of the method you accept. So I think that's the first kind of layer that we have to, to work through with, with merchants. You and I have talked about a lot of subjects over the years, and I think merchants are very experienced at what they do. If it's widgets or cups or steel or bananas or whatever they sell, they're experts in that. But what I find sometimes is they let the payment piece get a little bit sideways. And this is where I'm seeing where merchants are saying, hey, there's not much value for me in accepting cards in the B2B space. And I would say, listen, I agree with you, but I agree because you're allowing buyers to take advantage of a system that never was meant to be. You can't have term and have card use and have it be a happy coexistence most of the time.

Yeah, pretty much. It's the, you know, I tell businesses the same thing, you know. I always tell a story. I walked into an accountant's office one time, and he also bought a bookkeeping service. And I looked in his office when I went to visit him, and I see 6 people sitting around a conference table making phone calls. So I wanted to know what was going on in there because I heard what they were trying to collect money. And I said, well, why are you doing that? Let me show you a solution to this problem. You have people that are paying you $300, $400, $500, $1,000 a month, right? And nobody's paying you on time. Today, if you go look at this, if you go talk to the business owner, he's going to tell you I changed everything in his business because they went from chasing money to now they have all the money they need in the beginning of every month. And because every single customer is either giving them a credit card or an ACH Well, let's, let's— I'm doing it.

Let's do the math. So let's, let's, let's— for the audience that are listening today, let's give them a kind of a sense of what these numbers look like. So just off the top of my head. So businesses finance receivables today in one of two ways. So either you borrow money to support your receivables because you don't have enough cash. So you either have a line of credit or you have a business loan or something along those lines, or you're flush with cash, known as being cash rich, and you use your own money to finance those receivables. Because remember, if I sell you the widget or the cup or the steel and give you term, I'm waiting to get paid while my business runs. So now I'm taking cash that I normally would invest in my business to get a rate of return, and I'm using that to support my operation because I haven't got paid from my customers. So today the cost of capital is near all-time highs. I won't say it's at all-time highs, but it's at near all-time highs. And it's not uncommon for you and I to see a business with a weighted average cost of capital close to 10%. Let's just call it 9.5%. If you're waiting 45 days to get paid on a 9.5% weighted average cost of capital, you are investing 117 basis points to carry that receivable for 45 days. Now imagine you're taking a card on top of that and you're paying 2.5%. Now you're talking close to 4% to take that transaction. It's really expensive. But let's flip it the other way. Let's say that you, uh, institute an effective payment policy, and we should talk about some of the ideas I have around this that I think you might find very interesting. But let's go the opposite, and let's say that you have a payment policy that says to your buyers, hey, We happily take card from you, but our term is net 10, and you take your term of net 10 with us. You pay us with a card up to 10, and then, uh, you take your term with your issuer, another 30 days. Essentially, you're back to your 45-day term, and that 117 basis points is reduced roughly to about 100 basis points of value. Now I'm starting to claw back value in a working capital solution using card. Now, the response that you and I get all the time from people is, whoa, whoa, that sounds great, Raj, but like, how do I implement that? Like, how can I ensure that somebody buys me? And I was having this argument— well, I wouldn't say argument— I was having this debate the other day with somebody, and I said, you know, it is strange. We sent a man to the moon. We've just recently sent guys up to circle the moon again. I don't know if you're a believer or non-believer, Allen, but I'm a believer. Okay, so hell of a job in a tin can. That's all I'll say. But my point is we can send demand to the moon, but we struggle to rules base any of our payment systems. Any gateway out there should be able to rules base the card payment acceptance. In other words, you want to take card up to day 15 in your payment cycle, you select 15, and after 15 days, card drops off as a choice. Check, ACH, wire, whatever, RTP, FedNow, whatever you want to offer, comes in as a choice. Thereby, you preserve the merchant's ability to get paid faster on card. You don't change terms with the buyer because it doesn't change. The buyer, if they're on net 30 and want to still take net 30, they can get that. They just can't use card in that equation because it becomes ineffective for the merchant to accept it at that delayed term. Now, The natural thought from this is— and acquirers will say this to me all the time— hey, wait, Roger, that's, that's crazy because we'll miss that transaction at 30 days or 45 days or 60 days, and we want that. And I say, at the rate we're going, there won't be any transactions because the merchants will decide they don't want to take card and will be shut off completely. So we'd rather get them in an economically viable way than push the merchant to the point where they surcharge or they disallow acceptance or they do anything else. It's got to be a win-win. And I think that's where you get to that balance.

And I've had, you know, I've had reps from card issuing reach out to me and they're like, hey, we have this merchant. He wants to— he doesn't take card now. He wants to take card. And we have 10 customers that want to pay this guy. And they're all willing to give them 2%, you know, or whatever it is. And I'll call the merchant up, and sometimes the merchant's like, I don't understand, how does this work? I have to go through the process. And I remember I have one company, and I was looking the other day to go see how— because they were really struggling to switch over to card, and they went from doing no card to doing over $300,000 a month in card.

Yeah, that's a big swing.

When I talked to the owner, I said, well, you know, how's that working out? Right? Like, how is this working out for you? And he goes, he goes, how is it working out? He goes, he goes, I have my accountant off my back. The office manager is off my back. I don't have to fund this business anymore. You know, funding the business, you know, with the— they were, they were cash, you know, they had plenty of cash, right?

Absolutely.

They were essentially funding the business. He goes, now he goes, I'm not funding the business. And plus now the 2 women who worked in the office and another 2 people who worked there are no longer calling people on the phone going, where's the check? Where's the check? Where's the card? Boom, boom, boom. Because They're sending out an invoice with a link in it for the person to pay by card.

100%.

And these people are paying them. The guy says, I send it out. He goes, he goes, more than 80% pay the same day or the next day. They paid the invoice. And we're not talking about small invoices. We're talking $20,000 to $50,000, sometimes $100,000 invoices.

Sure.

And they're like, they're like so happy because their cash flow is now sped up, you know, and they even approached other customers and they said, well, if you, you know, if you're behind on paying us like up to 60 days, you can't order unless you pay some of your balance down and pay your next order on card.

Well, think back to when I sold you as a merchant. Allen has said was a restaurateur in Boca Raton.. And I was working for Amex at the time. Excuse me. And, um, I went in and I said, Allen, listen, you know, I think with the clientele that are in this neighborhood, I think it would be very advantageous for you. And we came to an agreement. And you started to accept Amex along with, uh, Visa, MasterCard, and whatever other cards you had at that point. But we never had a conversation about when you would accept card because it was implied. I have dinner. When the check comes, I put down my card and transaction is completed. Fast forward on 30 years and now we're entrenched in the B2B space because really business-to-consumer is fully subscribed. And that same methodology doesn't help the supplier. And what I mean by that is that the acquirer has to be able to articulate to the supplier the method in which they should take card and how and when they should take card. And these are conversations that the typical agents have not had to have in the past. Now it's like, hey, Mr. Merchant, you're on 30-day term. You should be using this solution as a working capital tool, not as an overhead. And when you see dedicated B2B acquirers out there, they have these conversations. You will see merchants who do this. In a very efficient way. They will not be taking card at day 60. They will not be complaining about the overhead or the line item cost of card. They'll be saying, hey, how do I get more of these people to pay me faster? So you and I, you and I need to have a chat about MPS's gateway and how do we rules-based that to make sure that it allows for that.

Yeah, we do allow for— you can add, you can take away the credit card when you're sending out an invoice, you can actually trigger it and it will only offer ACH after a certain date.

Oh, that's rules-based.

Yeah.

Yeah, that's, that's, you know, really important, I think, today because a lot of treasurers and folks that I talk to, you know, are kind of stuck behind the eight ball with this. They're complaining that they're not getting receivables in fast enough. And they're not using the tool they have right under their nose to do it.

A lot of times, you know, we'll talk to a merchant, and we had one merchant, and they told me, they go, the business owner, and they said, well, we like to take the card over the phone. And I go, you got to stop taking the card over the phone, because they made a mistake one day, and they either the customer read them the wrong number or they transposed it. They charged the wrong person's card $25,000. The person called them on the phone the next day. Hey, who are you? Why did you charge me $25,000? They had to do a refund, get another— get the card from the actual customer. A little bit of egg on their face with the credit card processor also, you know, for making a big mess up. So it's important to send these payment links out because during COVID okay, or the pandemic, whatever you want to call it, during that time, all these companies that collect bills from you as a consumer all started sending out payment links. So now this becomes a habit that people like, right? Yeah, get the payment link, click it, and make their payment, not talk to somebody on the phone. Like, I have one supplier I was dealing with, and every time we wanted to pay them, we had to call on the phone. The person wouldn't answer the phone, they would call back, 'I'm in a meeting,' and they want their money. Right? And, and I tried to sell them on payment links and they didn't want to do— they were like, no, we're not doing that. We don't want to change our— we don't want to change our merchant account. And I was like, well, I can't— I'm trying to help you. Like, I don't understand what you guys are doing. You want to take it by phone? Customers want to put the link in. Like, I have another client and they do car shipping and they switch to payment link Boom, they literally get more conversions when they're sending out the payment link than waiting for the customer to call them on the phone and give them the credit card. Sure. Yeah. And they also deal with car dealerships and all these car dealerships started to move the cars because there's not like enough cars, I guess, you know, they got to move a car from, you know, West Palm Beach to Ohio or something, right? Yes. Or from Miami to wherever. Orlando, whatever it is. And so they, they, they're all hitting them with virtual cards now. They know what it was. And I'm like, yeah, the virtual card, they send you the virtual card, that virtual card, if they send it to you and it's for $2,849.12, that's all you can process it for, correct? Can't process it for a penny less or a penny more, correct? And you have to process it that way. And we see more and more of that. We got a phone call from somebody else recently with average transactions $20,000 up to $80,000, and it's all business they're doing with car dealerships.

Sure, sure. Yeah. Virtual Card is one of those product lines that's growing about 25% year over year. It's a great product, single use, only good at the merchant for the amount of the invoice that it's issued for. And it can be automated today. There are people out there that will— excuse me— will automate that transaction through what's known as an STP, a straight-through processing situation. So yeah, I mean, everything you say, you know, sending out links. I mean, I was going to say this to you though. Accelerated payments and sending out links and getting paid faster is the antidote for the surcharging world. So, you know, that's kind of a dirty word, surcharging, I know, but it is something that has kind of taken a hold and it's an easy button approach that suppliers will take and it is punitive in nature to the buyer. And what I'm saying is you don't have to surcharge because you surcharge because you don't understand the value you're getting from what you're offering. So if you can claw back that value through getting your cash faster and using cards, that tool to do so, you don't need to surcharge, you don't need to be punitive. So I've seen an awful lot of people go out and enable surcharging and not communicate that there's an alternative strategy to that that you can be very successful at.

So, you know, the successful path is speed up the time to get paid and then you don't need to surcharge because you're increasing your cash flow.

100%.

You have to look at, you know, your time value and money, right? And get your money in the door faster. I mean, if you're selling something, you should have the money today and ship it out tomorrow and not be waiting to get paid from your customer because it's difficult to deal with that in that way. And, you know, we just see more and more, you know, virtual cards And the other thing we're starting to see, which is kind of— I don't— I wouldn't say it's freaking me out, but because there are services out there that do it, but we're seeing a lot of accounts— I guess there are accounts payable companies pop up who are paying the bills for customers. So you have to submit your bill, your invoice to like a third party, and then the third party is the one managing all the payments for the business. Yeah.

In large payable programs around the country, you know, if you're a large entity, an enterprise entity, banks will give them a payable program. And what that buyer will do, will submit to the bank on a particular day of the month, a list or a file, electronic obviously, of the invoices they want to pay and who they want to pay them to. And that bank will generate a one-time single-use virtual card and send it directly to that supplier, or in some cases process that through their own STP system and just fund then the bank account for the supplier and then bill back the buyer on their monthly statement, giving them term on their spend. So it's a very efficient process that takes place today. We do it here at Visa. We have our own payables program. We pay our vendors using our own product, which is a virtual card. And we offer them accelerated terms to do so. And we see a huge adoption rate from our suppliers saying, yeah, Visa, we love doing business with you, but man, you guys are waiting to pay us net 30, net 60, whatever the term is. And then we come along and we accelerate that payment to them and they love that. We show them the value of it and our program has increased dramatically over the last few years.

So, you know, there's a lot of talk, you know, about, you know, real-time payments and where we are with real-time payments. And really the only, you know, it's the real-time payment is card. It's not really all this other, all these other products because they're, they're not all exactly in, in real time when you're moving money out of a bank account. From bank account A to bank account B, you know, there's also ways for people to claw that money back and things like that. And those are definitely not, you know, and in the B2B space, we find like from the, from a standpoint of B2B, we don't see like chargebacks on B2B companies. You see very few, if any. Um, even on the ACH side, you see unless you put in the wrong account number, we don't really see that much, you know, failed payments and returns and things like that on that side of the business.

Yeah, I would agree with you. Um, I just read something before I came on the podcast today about payment types in the US, and for the first time now, RTP and, um, um, FedNow, the two real-time ACHs, let's call them, or same-day ACHs, have registered enough to be tracked now. When I mean that, I mean probably a trillion dollars each per year in that space. And we go by trillions because, you know, there's, there's so much payment in the US today. But I would agree with you. ACH still dominates. It dominates in cost because it's inexpensive. RTP and FedNow are, are faster versions of that, if, if it's the easiest way to understand it, but a little bit more expensive. So, you know, I, I think there are, there's plenty of room out here. I think virtual card is growing. I think card is growing. We know the check is in serious decline. I think I read the numbers today to say it's down to $17 trillion from $19 trillion. Last year. So think about that. There's still $17 trillion being paid in check in the US and it hasn't died a death yet.

Astonishingly, I had somebody ask me for a check recently and I started laughing and they were like, what's so funny? I said, I don't remember the last time I had to write a check.

Yeah, I kind of tell the story. When's the last time you were at the supermarket and you saw somebody holding up the line writing a check? You know, it just doesn't occur today.

I saw it a couple of weeks ago at Publix. Somebody was trying to—

Yeah, it's a strange phenomenon. I was talking to a large B2B supplier not long ago, and they had a lot of check. And I said, well, why do you think people still write checks? And their simple answer was because we still accept them. And I think that was very telling. In other words, people will keep doing whatever you allow them to do. Businesses will keep writing a check if that's the way they've done it. But this company has devised a strategy to move away from that. So they had now put a fee around paying them with a check. And it was, it was a trident, the number of check writers instantly because people were saying, wow, sometimes that my invoice is less than the fee that you've charged me for, for writing this check. So I think a lot of it has to do with the fact that businesses have just done something a particular way and they just need to get off the merry-go-round for 5 seconds and stop it. And once they do, you know, we'd all like to look back, you know, 50 years ago when it was all check. But now, you know, with $19 or $17 trillion still in the ecosystem, I think that we're seeing the precipitous decline of check out there.

You know, we also, you know, we hear lots of buzzwords about payment orchestration and embedded payments. And these are like words that get thrown around a lot. And like when I think of payment orchestration, I think of, you know, somebody's doing business internationally and they need to take payments in different, you know, currencies. Like, oh, we do business in Brazil, so we have to take the Brazilian form of payment, or they need to take Alipay. And I think of it in that. But when I see people throwing it around, like, at smaller merchants, I'm like, I don't know what you're orchestrating, because I think a lot of businesses don't understand, like, You know, is your payment— is your pay— are your payments set up correctly? Like, if you're doing a ton of B2B, we're going to put you on our smart invoicing tool so you can send— you can process an invoice even if you're processing it manually. And it's going to— if the card is a Level 3 card, it's going to push the Level 3 data through automatically. If it's not a Level 3 card, it's not going to push that data. And you're going to have a compliant— and, you know, and making sure that you're using the correct SIC code for your business, that's also super important because that drives interchange.

Yes.

Using the wrong SIC code, you could be paying higher interchange fees. And, you know, those are, those are the, you know, those are the things that, you know, that cause, you know, friction is the SIC code is wrong or the, you know, the business descriptor isn't accurate and things like that.

Sure.

You know, there's a lot of, you know, talk about that. That's more important than trying to orchestrate your orchestrate.

Yeah. You know, you use that word payment orchestration. A lot of terms there that you used that I see in B2B, embedded payments, payment orchestration, APIs. You know, working capital, all these things. And businesses throw out these because they read them or see that they're topical. The one I love today is everyone is talking about agentic AI. Right. You know, a year ago I didn't know what agentic AI was. I had to go look it up and it's, well, it's agents, bots in AI being utilized to do certain things. So there's all these new terms, but it leads to a kind of a broader discussion and this is, When we think about payments within a business, seldom are the people that are in charge of those payments experts in payments themselves. They've had to either learn it on the fly, and this business changes a lot. But normally it's finance people that are dealing with lots of other things within the organization, everything from producing annual returns to tax and audit and payments and staffing and all sorts of stuff. And we occupy this one bit of brainpower for them. They're experts in business in selling the products that they develop. You know, if I'm a steel manufacturer, I'm an expert in the cost of steel and how we get it there and how we ship it and how we put it, erect it and all that sort of stuff. And I think, you know, it's funny you should mention this because I think there's this area of opportunity for like fractional payment experts in our industry. That can go into these businesses and help them understand, hey, I'm getting a good deal. Hey, I'm doing this wrong. Hey, I'm not doing this right. And not have to invest the resources of the current staff that have 1,000 other things going on and can't do things that they need to do, like write the code, let's say, to, um, to rules-based their system or RFP their services or anything like that. So there's so many challenges that businesses face today because they're doing so much with so few resources that when these things come along, like payment orchestration, which I believe is just someone else in the transaction doing some work, they can get lost. You know, when you and I started in this business a long time ago, there was a processor, an acquirer, and a network, and that was it. And in a lot of cases, the processor was the acquirer. And you didn't even have a separate acquirer, and very few people touched the transaction. So the acquirer put a fee on it, there was the interchange, there was the assessment, and that was it. But today we see so many layers with gateways and payment orchestrators and, um, um, CRM, ERPs, everything is in tune and everybody is, you know, it's complex. And I've seen some good illustrations of this. But I lament about the days when it was very simple, when you and I were out there and it was just you between yourself and the customer and the processor. And that was pretty much it.

Yeah, it's interesting. You know, there's a lot of people you hear these terms like, oh, fractional CRO, Chief Revenue Officer. Somebody asked me what a CRO was. I said, it's Chief Revenue Officer. And then I said, You know, then you have, you know, fractional CFO, chief financial officers, because some companies don't want to pay somebody $300,000, $400,000, or $500,000 a year to be a CFO, and they don't really need a full-time CFO. They need somebody to help them. But one thing that I see a lot of companies need is a chief payments officer. Like, we have a client that has probably like 20 websites. And it's not organized. And we sat them down and we're like, you need to become better organized in this 20 merchant accounts that you're running, right? And understand, you know, you need to have like a spreadsheet or something so you know, like, oh, this merchant account is on this bank and this is the contact person. And if you don't have a contact person for whoever's processing millions of dollars of your money, you need to move that business somewhere else. Because if you're sitting there showing me, oh, well, we're having a problem with this merchant account, we don't do that merchant account. We have this one, this one, and this one. So what can we do to help you with that merchant account? Sure. And businesses need to understand, like, that having a payment expert, you know, and I tell people, like, we work two ways. Way number one, you pay us a fee and we're going to advise you, help you with your, you know, your, your statement and analyze it and tell you, okay, let's get on the phone with your processor and let's see how we can maximize your, your payments so that, you know, you're getting a better rate from the payment provider. Or you come to us and we bring you to, you know, to a to one of our processors and we get you the best deal over there. And then we work basically for free. And, you know, we explain to them, you know, we're, you know, we work for— because I always tell my merchants, they go, well, who pays you? And I go, well, the bank essentially pays us, but we work for you. And it's my job to get you the best deal, make sure you have a processor that understands what you sell, how you sell it. And who you sell to and what, how big or, or how small or how many transactions you do, and make sure that you have a good relationship with this company, meaning that there's communication when there needs to be. And when you don't, there's something you don't understand, that's where we jump in and help you understand what that is. And a lot of people don't understand, like, what, what does all that mean? They listen to people and they hear a lot of, uh, jargon. You know, when I was a chef, I'll never forget one of my teachers in culinary school said, dazzle them with brilliance or baffle them with bullshit, right? So sometimes you're getting somebody, they're using a lot of jargon and a lot of terms, and you're like, oh well, this sounds like it's good or knowledgeable. And meanwhile you're not getting the right advice because you don't understand how, you know, the flow of payments and change. Like you're saying, like, hey, rules-based, having rules with your customers. And like I told you about that big client who had a room full of people collecting, right? So he goes, well, how do we introduce this? And I said, well, how you introduce it is every new client has to sign up to pay automatically. And then all your old clients, you got to start sending them out an email going, hey, click here because this is how you're going to pay us from now on, and you're going to be on an automatic payment every month so that we don't have to call you and bug you and wait for checks or drive over and get a check from you. And today that person would tell you, like, he's never switching. 'Never. The guys had the software forever and they're not going to switch.' And everybody we show this software to, they tell us the same thing: 'Wow, wish we would have listened to— we would have got this years ago because it's so easy to use and people don't mind paying us early.' Right? They just can't— they don't— they don't— it doesn't click in their head. They're like, 'Wow, these people,' you know, because I go in sometimes after a month or two And I go in their system and I show them. I said, oh, you want to see how fast you're getting paid? And then I log in and I show them like, oh, you sent out this many invoices and this was your average amount of time you waited to get paid. 2 days, 3 days. I'm like, that's improving your cash flow. And then your money, instead of it sitting in your checking account making no interest, can be in a CD, can be in a money market making 3, 4, 5%. Yeah.

Or can be a product, making more product to sell to more customers. I mean, right.

Or you're investing in your product, you're investing in your inventory and all that.

So that lack of, that lack of knowledge in B2B, you know, is, is scarce out there, Allen. You know, there are precious few people that focus on acquiring in the B2B space with the relevant knowledge and skill to be able to communicate this to suppliers and when necessary, buyers. You know, on the issuing side, a lot of buyers have been increasing their DPO by using a payables program, and that's the way it's been sold to them. But in reality, the merchants are much smarter and faster today, and they realize that, hey, I can't sit here and I can't finance this. Now, getting them to switch over and rules-based systems we talked about can be a little difficult, but You know, the premise of card and what it does and how it works in B2B, I think you and I will both agree there's tremendous value to each side or each component in the equation and more so than any other, I believe, payment product that's available out there. You know, I don't know that ACH has a tremendous amount of value to a buyer to use.

But card does have value. The card has value because almost all these cards that businesses are using, they're getting cash back, miles, points, rewards.

Yeah.

Getting something for that spend, you know.

And here's the ironic part. Every buyer is also a supplier. So everybody who's in tune with using card also is someone who has the ability to accept card. They love to use it, not so much accept it. We've got to get to that more balanced approach where they love to use it and they love to accept it too, because there's equal value on both sides of that equation. I think that's very important for us to get to. Yeah.

So if there's one thing every B2B company should review in their payment setup before the end of 2026— pricing, fraud tools, you know, invoice workflow, rules-based payments, interchange category, or something else. What do you think that is that B2B companies should look at?

They should look at, look at their payment policy. And if they don't have one in place, they should institute one. If they have one in place, they should rules-base it to make sure it's adhered to. And that will allow them to do a number of items in that process, lower their interchange costs because they'll see the working capital benefit that they can use against that. Have happier customers, better cash flow. The, the on from that one exercise is immense. So, you know, I would say of all the things you listed there, you need to make sure that you have an acceptable acceptance policy that works for you, that works for your buyers and works for your bottom line.

All right. There's our B2B Vault, all about B2B payments today with Roger McNamara from Visa, the director of B2B payments, and me and him are B2B payment nerds for many years. He's the person that I enjoy talking to about this because he's super knowledgeable and, uh, makes me feel— when I, when I talk, when we talk, you know, you validate all the things that I say. So it's, you know, and one of the biggest things is businesses need to stop being the bank. Customers. Customers already have a bank and they have cards, and they can float that money through there instead of through you.

Way to go, Allen.

Super important thing. So thank you everyone for listening to B2B Vault today, the Biz to Biz podcast. Thank you to Roger again for coming on, and thank you to Visa for allowing Roger to appear on the podcast. And everybody have a great day. Carpe diem, seize the day.