Frequently Asked Questions
Frequently Asked Questions
WHAT CAN JOLLYPAYMENTS COMMERCIAL PAYMENTS DO FOR YOUR ORGANIZATION?
Automation – Maximize the automation of costly accounts payable (AP) processes through the elimination of checks while creating significant efficiencies. According to the industry’s leading authorities, the full cost of invoice processing and payment by check is * $39, depending on an organization’s internal processes. Therefore, every eliminated check represents cost savings.
Incentive Creation – Transition accounts payable to an incentive generator by earning a financial revenue share for converted AP suppliers.
Treasury Value – Take advantage of our expert consultation and benchmarking services to review your supplier payment terms. Our consultants can help maximize your organization’s cash strategy.
WHAT IS THE SINGLE MOST IMPORTANT QUESTION THAT PROVIDES INSIGHT INTO AN AP OPPORTUNITY?
Do you rely primarily on checks today to pay your suppliers? The more reliant organizations are on check payments, the greater the need to automate. In the U.S., businesses still pay over half of their invoices by check according to a survey conducted by the Association for Financial Professionals. Checks are also costly to suppliers because they must wait for checks in the mail, pay for processing, and then wait again for the checks to clear. Buyers can generate incentives while providing electronic reconciliation to their suppliers through the our solution suite and its commercial payments experts.
WHAT CAN BE THE FINANCIAL IMPACT FOR AN ORGANIZATION?
The financial impact is based upon the size of an organization and its current payment and treasury management strategies. The value is driven by a combination of automation, incentive creation, and process savings. Based on the estimated cost of a check, a company that relies heavily on checks and has a $500M annual supplier spend file can realize a financial impact of approximately $1M annually. This impact is achieved through efficiency savings and revenue generation in the form of rebate on transaction volume.
HOW MUCH DOES IT COST TO IMPLEMENT THE APX STRATEGY/SOLUTION?
Our consultation is 100% free of charge. In addition, the cost of delivering the automation benefit to an organization is $0 hard dollars. Organizations partner with our team and assign an IT Resource (for up to 10 hours) and a project manager. The project manager makes key decisions regarding the program structure and attends weekly calls to discuss progress until full implementation is achieved. We will use your existing ERP/accounting system to push out a PIF (payment instruction file) to Our Accounts Payable Exchange. There is no costly software to utilize our payment stack or platform.
WHAT SOLUTIONS MAKE UP THE JOLLYPAYMENTS ACCOUNTS PAYABLE EXCHANGE (APX) OFFERING?
Some organizations already have an automated payment solution in place. However, most payment solutions are designed to address only a portion of an organization’s payment needs. The JollyPayments APX solution suite is designed to address all payment needs and provide multiple products and services to meet those needs.
Virtual Card – Buyer sends a payment file of approved invoices for suppliers that agree to accept this payment method. A single- use account number is passed to a supplier to process. The buyer receives a financial incentive via basis points on volume.
APX Direct – For this solution, the buyer approves an invoice and sends an email notification to the supplier providing the invoice number. The buyer asks the supplier to process the transaction using the card number that has been securely provided (supplier keeps the number on file).
APX Dynamic Discounting – This solution is similar to an early pay discount. The cost is flexible and depends on the number of days the supplier is paid earlier than their standard payment terms. For example, the supplier may agree to a 1.50% discount in return for payment 30 days early. The discount is pro-rated if the early payment (in this example 30 days) is not met.
APX ACH (+) – Supplier agrees to a flat basis point (BP) discount with no commitment of early payment. The flat discount rate is negotiated based upon the supplier value proposition.
APX Straight-Through Processing - What if your suppliers cannot – or choose not to – accept your invoice payments via card? You can still benefit from the advantages of making virtual card payments to suppliers. We process your payment on our platform and pay the supplier the next day from their choice of non-card payment, less the fixed percentage of the payment amount. You still receive the revenue rebate share.
Proxy Pay – A solution that enables electronic payments in industries that only accept phone or web payments.
APX ACH ($) – This option is targeted for financial, rent, and any other supplier verticals where there is a flat transaction fee.
Check Processing – Outsource manual check processing to JollyPayments.
WHICH ORGANIZATIONS QUALIFY FOR OUR COMMERCIAL PAYMENTS PROGRAM?
Any organization that has Non-Payroll Accounts Payable or Medium to large annual revenues. There is no maximum.
MIGHT MY SUPPLIERS RAISE MY PRICES TO COVER THE CREDIT CARD PROCESSING FEES?
Not very likely. If the suppliers have that intention, they will tell the enrollment specialist that they intend to include a surcharge in return for acceptance. At that point, the enrollment specialist will notate the lad and mark this as lost.
This happens approximately 5% of the time. With that said, there are times that suppliers will rescind their enrollment at a later date due to cost concerns.
WHAT IS THE DIFFERENCE TO STANDARD INTERCHANGE VS NON-STANDARD INTERCHANGE?
Standard: Typically, more than 70% of transactions will be Standard Interchange. This is where you get paid the full basis points on the transaction.
Non-Standard: A transaction where the supplier submits additional information in order to qualify for a cheaper rate.
Supplier must be setup to take credit card payments in this way through their Merchant Acquirer. Interchange is lower on these transactions and revenue share will be less.
HOW DO VIRTUAL CARDS TRANSLATE INTO CAPTURING LOST REVENUE FOR MY ORGANIZATION?
Your organization may capture revenue each time you pay one of your vendors with a virtual credit cards.
With each transaction, your suppliers pay a small fee in exchange for the benefits of accepting credit cards.
Each time your organization utilizes a virtual card-based platform, you capture the lion’s share of those fess back in the form
of a monthly or quarterly payout. Many of your vendors accept virtual cards today (even though they haven't offered it up)
If you’re paying via check/ACH, that’s revenue lost for your organization every month.
Every $10 million converted to Virtual Card Payments allows an organization to capture
approximately $100,000 in revenue share/rebates that would otherwise have been lost.
DOESN'T MY BANK OFFER VIRTUAL CARDS?
Some banks do and some don’t. Those that do tend to have less success with vendor enrollment
then does an organization dedicated to virtual payment programs. As a result, organizations tend to
have to do more work and see less success related to vendor enrollment when using their bank as a
virtual payment provider. Additionally, many organizations like the flexibility of not tying virtual
payments to one particular bank.
Also, many banks offer a watered-down solution (i.e. Single-Use Virtual Card only) where the
check/ACH still are done separately. A Fully Integrated Payables (FIP) platform allows every single
payment, regardless of the type to be fully automated. Banks shy away from this complete offering
because it’s counterproductive to their treasury fee goals. A true fully integrated payables provider,
should be treasury agnostic, which helps significantly reduce the cost of traditional treasury bank
fees for the buyer.
HOW MUCH WILL COST FOR ME TO GET STARTED?
We charge absolutely nothing. An FIP program should cost nothing for you to implement,
not at the outset, and not at any point during your participation with it. If you decide to utilize the
check and ach service in the program, some minimal transaction fees may apply, but because of the
significant earnings on the revenue generating payment types, the net effective cost is nothing to the
buyer…in fact the FIP provider is paying the buyer to use the technology.
HOW MUCH DOES ACCEPTING VIRTUAL PAYMENTS COST MY SUPPLIER?
It varies by supplier, with average fees ranging from 1.5% to 3% (comparable to those assessed by
credit card companies to vendors). But accepting cards also has benefits to your supplier. Virtual
cards payments allow suppliers to provide their customers with a greater level of service and
convenience. Additionally, virtual cards are easier and cheaper to process than other forms of
payment, and provide both buyer and supplier with greatly enhanced payment security. Virtual cards
are more secure, they provide guaranteed funds but most importantly by getting paid faster they
significantly help suppliers merge DSO (Days Sales Outstanding) and DPO (Days Purchase
Outstanding) closer together, which helps maximize cash flow… not to mention the competitive
advantage over other suppliers. If you’re paying a supplier with check or ach that is already
accepting a virtual card from other buyers, you are essentially losing out on revenue that other
organizations are realizing.
WHAT IF SOME OF MY SUPPLIERS/VENDERS WON'T ACCEPT VIRTUAL PAYMENTS?
Suppliers will accept Virtual Cards as a form of payment based upon the value proposition set forth
by the Buyer. A strong value proposition would include a strong endorsement for Virtual Card being
their preferred method of payment, the potential of accelerating payment, as well as a further
automation of the payment. With these factors present in the value proposition, we will typically see
Card acceptance rates between 30%-40% of targeted leads.
For those suppliers targeted that decline accepting card as a form of payment, a complete FIP
platform will offer an alternative solution with reduced cost while still providing automation. This
comes in the form of either ACH+ (flat fee)/ Buyer Initiated Payment (BIP) or Dynamic Discounting
solutions. While most FIP providers have 3 payment types, check, ach, and virtual card. There are
FIP platforms that have upwards of 7 payment types, with 5 different ways of generating revenue
share. The more variation of payment types available, the better acceptance and revenue
opportunity for the buyer.
WHAT IF MY VENDOR ISN'T AVAILABLE TO ACCPET CREDIT CARDS?
This is where selecting the proper FIP provider becomes so pertinent. For suppliers that do not
currently have the ability to process credit card transactions, some of the FIP providers should/will
have the ability to set them up to accept Card as a form of payment. They can do so with the
traditional Virtual Card solution or establish the supplier as a Buyer Initiated Payments (BIP)
acceptor. The BIP process brings added automation to the Buyer by allowing the FIP provider to
process the transaction on their behalf and then forward the remittance advice for settlement.
This push pay technology allows you to pay vendors that are unable to accept card payments with a
card transaction that acts like an ACH. To you and your AP team, there is no difference in the
process; for your vendors, the process is simple and requires no changes for them.
HOW DOES VIRTUAL CARD WORK WITH MY ACCOUNTING SYSTEM or ERP?
Your accounting system already generates payment files. Virtual card technology simply directs
these payment files to ride on the Visa Card system. There are only two requirements for this to
1. Your accounting system must be able to produce a payment file with the Merchant/Supplier ID,
Invoice Number, Invoice Date and Invoice Amount.
2. You must be able to identify vendors as having a payment method that is unique from your
current forms of payment. So, if you now “flag” vendors as being paid via check or ACH, you must
flag vendors that are paid via virtual card as “other,” or “card,” or some other identifier.
With over $40 billion in payments already processed via payment card each year, just about every
accounting system is able to support these two basic requirements.
HOW LONG DOES IT USUALLY TAKE TO GET UP AND RUNNING WITH A PROGRAM LIKE THIS?
It depends on the size of your company. It usually takes between 1-8 weeks to get an organization up and running. All that’s needed to get started is a supplier list (supplier name, address, point of contact, annual AP spend) and the payment file
addressed in the question above. Once those two requirements are met, some basic account setup finalizes implementation, and then the vendor enrollment process begins.
ISN'T THIS TOO GOOD TO BE TRUE?
We get this question a lot. And, honestly, we understand. When’s the last time you really got
anything for free, much less thousands of dollars in rebates? The reality is, it’s just a revenue share
that FIP providers give to their clients/buyers, in exchange for them using their technology. There’s
no catch, it’s just the benefits of the Electronic process, that runs on the “Card Rails” even though
there’s zero plastics involved. Simply put, FIP is designed to integrate with AP workflow, however
the revenue share is pulled from the same pot as our rewards, cashback, and points that we are all
used to getting as consumers when we use physical plastics.
WHAT'S THE DIFFERENCE BETWEEN USING A REWARDS CREDIT CARD AND VIRTUAL CARD PAYMENTS?
Virtual Card Payments are made through the organization’s existing accounting software and
remittance is sent to the supplier with the payment. If they have 500 suppliers being paid through
Virtual Cards, they are all paid at the same time, with no manual effort. Virtual Cards use single-use
Visa card numbers so suppliers cannot run them again, and cannot be ran for more than the amount
that is being paid. Virtual Cards are simply a technology play that allows “Card Technology” to finally
integrate into the AP workflow, while maintaining the same reconciliation and regulatory needs of AP
departments and accounting professionals. Virtual Cards allow AP departments to push suppliers a
payment using the same ERP/AP software and keeping the same integrity of the AP Workflow
process. Virtual Cards are one of the tools embedded in an FIP platform that bridges the gap
between traditional plastics and the AP workflow.
Credit cards require providing the card numbers manually, reconciling credit card statements, and
having to cancel cards and get a new number every time fraudulent activity occurs, which could be
often if paying 500 suppliers with the same card.
Virtual Card Payments save the AP departments both time and money, are more secure than
Check, ACH, or Credit Card payments, and provide a rebate. They can do all of this while integrating
into the established AP workflow, and maintaining the same Data Integrity for suppliers desired
Credit Cards are best for one-time purchases where a physical card is needed and not suitable for
WHAT IS A P CARD?
A "P Card" or "Purchase Card," is typically issued to employees to be used for expenses such as
employee travel expenses or office supplies, not for making supplier payments. Some "P Cards" do
pay rebates or cash back but their used for on the spot, immediate payments, not for making
supplier payments from invoices. The P Card is simply a physical plastic card with more controls
assigned to it (MCC restrictions, Custom Credit limits, Vendor Specific Cards to be kept on file).
HOW ARE YOU DIFFERENT THAN ANY OTHER ACCOUNTS PAYABLE PROVIDERS?
First off, there is really no competition in this field. Our platform technology is 100% owned and there are NO third party software companies involved. Our cloud integrated payment technology is way above any competitors or banks and our services we offer are unmatched. Here's a list of some of the ways we are better:
1. Our cloud-based technology is 100% owned and all integrated-accounts payables services are in-house.
2. Our consultation, software, supplier activation, on going support, IT resource (up to 10 Hours), and on going project manager all cost $0. If you decide to utilize the check and ACH services in the program, some minimal transaction fees may apply.
3. Unlike banks we do NOT require you to change your bank or financial institution in order to use our technology or services. You can use a single bank or financial institution or as many as you like.
4. Our platform owns the ACH and does not push off your ACH (electronic checks) to a third party vendor. Our ACH platform is one of the few processors in the nation entrusted with a Fed Terminal onsite. This gives you earlier responses for return information and exception handling with the latest possible cut-off times. By keeping your ACH in-house you don't risk a third party company to handle your transactions that may create transaction errors and delays in payments.
5. Most companies just use software and offer a watered-down AP automation that uses third party vendors. We are not AP automation, but we are a full Integrated Payable solution. We are the link between AP automation on the buyer side and AR automation on the supplier side.
6. Most other companies or solutions will offer just a few ways to automate your accounts payable with weak software. We offer a complete automated solution with over 9 ways for you to benefit on each transaction. We work directly with organizations and in partnership with financial institutions, card networks and other marketplace partners. We team unleashes potential value within the payments ecosystem by enabling buyers to benefit from discounts, rebates and incentives, and suppliers to benefit from cash acceleration.
7. Our team is one of the only virtual card issuer. What does that mean? It means that we actually issue the cards, control the rates, and offer you the highest rate of cash back. Overall, This allows you cash back from each transaction and benefits you and your suppliers. Your suppliers receive wholesale credit card interchange rates by accepting your virtual credit card for payment. A win-win for both. That makes your accounts payable a revenue maker!
8. Our Agile platform leverages your existing ERP system to eliminate costly checks and manual processes, integrating all forms of payment. A Single payment instruction ﬁle is all we need to pay every supplier in your AP system!
WHAT ARE THE MAIN STEPS TO IMPLEMENT THE JOLLYPAYMENTS APX SOLUTION SUITE?
The steps associated with implementing JollyPayments Commercial products and services will depend on the recommended strategy for your organization. However, a recommended part of every strategy is to take advantage of JollyPayments Supplier Enablement services. The main steps associated with a supplier enablement review and campaign are:
1. Parties sign NDA (non-disclosure agreement)
2. Allow JollyPayments to access your business needs, goals and objectives.
3. Obtain 12 months of supplier spend files to allow for detailed analysis and expert consultation and strategy that is best for your organization.
4. Confirm alignment on the recommended strategy.
5. Sign agreement.
6. Discuss integration steps and IT execution (simply to create output for payment file).
7. Identify sensitive suppliers that should be omitted from the payment conversion outreach.
8. Approve endorsement letters to be sent to your suppliers.
9. JollyPayments team begins the supplier campaign.
*(1) 2018 Electronic Accounts Payable Benchmark Survey by RMPG Research Corporation