Consumers, businesses swap payment playbooks

B2B surcharging, personal balance sheets and other emerging payment trends are turning heads this season, payments analysts have noted. Experts attribute blurring lines between consumer and business transactions to widespread digital commerce adoption. Ultimately, all stakeholders, including merchants and customers, want to transact in a secure, simple, seamless way, stated Allen Kopelman, co-founder and CEO of Nationwide Payment Systems.

"To this end, we and other service providers are facilitating credit card surcharging for B2B merchants," Kopelman said, adding that cash discounts are also an option for merchants that support ACH transactions online. "Business owners tell us all the time that they want to provide the same kind of shopping journey they personally enjoy as consumers to vendors and sales channel partners. It's up to us, as service providers, to balance security and convenience by making B2B transactions as simple as possible."

Expanding B2B finance options

Balance, a B2B financial technology and end-to-end payment solutions provider, disclosed on July 10, 2023, that B2B surcharge will be part of its platform. The feature will help merchants maintain healthy margins by adding a convenience fee to credit card transactions, according to Nir Gazit, vice president of product at Balance.

"Merchants need to operate in a favorable payment environment, where the cost of accepting online payments does not outweigh their value," he said. "Balance's surcharging program enables B2B merchants to effectively meet the needs of customers that want to pay with credit card while ensuring appropriate operating margins for their business."

Bar Geron, CEO and co-founder of Balance, pointed out that paper-driven procedures and inflexible cost structures are impeding business growth and sales opportunities. "Our commitment lies in overcoming these obstacles through B2B-first payment technology that actively encourages the adoption of online payments," he said.

Geron further noted that consumers have mixed feelings about surcharging, but B2B customers will happily trade a small convenience fee for the extended float of a credit card transaction. He also noted that Balance's B2B surcharge offering enables merchants to offer more flexibility and choice in customer payment methods while improving their profit margins.

Customizable parameters

Citing data from the National Association of Credit Management, Geron described B2B surcharging as a solution that addresses the need of nearly two-thirds of merchants to handle high credit card transaction volumes without having to manage escalating processing costs.

Merchants can customize surcharging and integrate this functionality into invoicing and checkouts, he stated, adding that these capabilities are crucial to B2B ecommerce and will help foster a mutually beneficial payments ecosystem.

Balance representatives affirmed that B2B surcharging is a noteworthy trend that can help business owners enhance efficiency and customer convenience. Businesses can unlock new revenue streams, they noted, by incentivizing and facilitating B2B surcharging in response to increasing demand for credit card payments.

Consumer finance tools

Personal financial management has become a new frontier for banking and credit union apps, according to recently published reports by J.D. Power. The J.D. Power 2023 U.S. Banking Mobile App Satisfaction Study; 2023 U.S. Online Banking Satisfaction Study; 2023 U.S. Credit Card Mobile App Satisfaction Study and 2023 U.S. Online Credit Card Satisfaction Study identified personal financial management tools as critical to bank and credit union customer experience.

Jennifer White, senior director of banking and payments intelligence at J.D. Power, mentioned that customers expect advanced features in banking apps and online tools.

"Many banks and credit card providers clearly recognize this potential and have focused heavily on new digital tools related to personal financial management, but the results have been uneven thus far," she said. "While some providers are really elevating their customers' digital experiences, others are struggling to get past basic transactional features."

J.D. Power researchers also found regional banks struggling to compete with national banks, citing the following key takeaways from the studies:

• Basic transactional tools outperform advanced features: Banks and credit card mobile apps that offer account transfer, bill pay, mobile check deposit and peer-to-peer lending are resonating with customers and more advanced features are taking longer to gain adoption.

• Personal financial management tools, when used, drive satisfaction: When customers actively use personal financial management tools, such as credit score monitoring, spending analysis and budgeting tools, satisfaction scores rise 127 points versus when these tools are not offered.

• Virtual assistants do heavy lifting on adoption: Customers who use a virtual assistant provided on their banking app are four times more likely to use personal financial management tools.

• Regional banks struggle to compete: National banks' digital apps garner higher customer satisfaction than those of regional banks, which show significantly wider range of performance between top- and bottom-ranked providers.

Additional information about the J.D. Power studies is available at: jdpower.com/business/resource/us-banking-and-us-credit-card-mobile-app-satisfaction-studies.

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