Are V Card Payments What Suppliers Want
Each year, suppliers across North America are blindsided by v card, or virtual card fees – fees that they didn’t know would exist. The use of automatic enrollment of the supplier by v card payment platforms takes the supplier’s voice out of the equation, leading to unanticipated service fees. Those receiving B2B payments ought to have a say in whether or not virtual credit card payment will be accepted, yet few virtual card platforms have implemented any such process.
What happens when suppliers don’t stand up against v card payments?
- The continuation of policies targeting suppliers
In 2013, the Hospital Corporation of America testified against health plans that automatically use virtual cards for payment. This automatic use of virtual credit cards resulted in an addition 3 million dollars in credit card fees for the hospitals. However, the backlash was small and virtual payment platforms have still refused to protect the interests of the supplier. If left unchecked, virtual card networks may arbitrarily introduce new charges that target suppliers.
- Decline in small businesses
The predatory tendencies of virtual credit card networks have the potential to harm small businesses tremendously. Opting out of virtual card payment can be an intimidating battle, especially when you have a significant balance in your account. If one wishes to escape the grasp of card fees and transition to ACH payment, virtual card networks charge a termination fee for a service that the suppliers didn’t voluntarily opt-in to. This practice takes advantage of suppliers and needs to come to an end.
- Continued victimization
Virtual credit card companies use manipulative advertising techniques to convince buyers to settle invoice payments using virtual cards. These companies knowingly trap suppliers into their network through buyers who know nothing of what they are inflicting upon their supplier. With each new business director that begins to settle invoices with virtual cards, dozens, sometimes even thousands, of suppliers end up receiving overcharged payments. Imagine the revenue loss if a majority of your buyers started using virtual credit cards for payment.
What will it take to stand up against v cards?
- Supplier unity
Do you belong to an active business network? If not, you are increasing your vulnerability in regard to virtual credit card’s opt-out system. Inform your fellow business professionals on the high transaction costs and manipulative card policies that come with the acceptance of virtual card payment to raise awareness. The knowledge will help them avoid reductions in revenue and production.
- Talk to your buyers
As a supplier, it is important that you discuss whether or not virtual card payment will be accepted to settle invoices. This conversation will improve buyer/supplier relationships by eliminating any conflicts that will arise due to unexpected transaction fees, not to mention how hard it is to track payments made via virtual card if any information is entered incorrectly. If virtual card payment isn’t right for you as a supplier, recommend that your buyers use your designated mode of electronic payment, whether that be other online payments such as PayPal, Skrill and Google Wallet or simply ACH transfers.
- Enforce legal action against automatic opt-ins
Ethical business strategy occurs when there is the presence of willing buyers and willing suppliers. Virtual card providers are using the willing buyers to corner the unwilling suppliers into their networks through their automatic sign-up feature. By the time the supplier has realized the costs of virtual card use, they have usually already incurred high service charges. Rather than suffering in silence or taking to social media, suppliers should take legal action to prevent virtual card platforms from taking advantage of hard-working Americans.
V Cards – What it All Comes Down To:
Uniting against virtual card payments for B2B transactions will prevent the further exploitation of suppliers. Virtual card networks are claiming high transaction charges, yet somehow still take ages to process payments.
Create awareness against virtual card payments in your industry by sharing this article with your fellow entrepreneurs on social media.