We’re
always looking for the perfect add-on product—something that is a
logical complement to a merchant account, that delivers real value to the
customer, and that gives the ISO something substantial for their time and
effort. We think we’ve found one for business-to-business accounts.
Businesses
that sell to other businesses (B2Bs in today’s lingo) often use credit
cards to guarantee the first couple of transactions they process with a
customer. These card-not-present
transactions are an effective alternative to shipping goods C.O.D., and
are a great pre-cursor to establishing regular terms with a customer. But
something interesting almost always happens after the first one or two
transactions: the business customer wants “Net 30” terms. It is easy
to understand why. For a business buyer, credit cards result in variable
payment terms. Sometimes, the buyer pays 20 days after the transaction . .
. sometimes 45 days, depending on the next statement date. This makes it
difficult to manage cash. Plus, for a business that has $500,000 in
revenues, they can’t run all their purchases through a $10,000 to
$20,000 credit card line. So, they ask their vendors for terms, and the
vendors almost always say yes.
Often,
these vendors who say yes to terms would prefer it if their customers
continued to pay via credit cards, because they like the cash flow benefit
that credit card payments offer. A company in Silicon Valley by the name
of Inzap has developed a solution to address this need. With Inzap, the
merchant can offer their customers 60-day terms and yet still get paid
very fast, typically in less than 10 days. The system is Web-based, but it
can be used by any company that has dial-up Internet access, whether or
not that company has a Web site. Here’s how it works:
• The merchant sends an invoice to their customer as
they do today.
• The merchant enters the invoice number and amount
into the Inzap Web site.
• The customer clicks a button to authorize the
invoice on the Inzap Web site.
• The merchant then gets paid electronically.
• The customer pays 60 days after the invoice date,
also electronically.
Since
it takes only 5 minutes to sign up for Inzap, merchants and their
customers can begin using the system very quickly. The merchant’s
customers get a real benefit (60-day terms) for using this system, and
they get the security of knowing that they authorize every transaction
before it is paid.
What’s
in it for the ISO? Well, Inzap has a program in which the ISO is
compensated based on residuals (5% of Inzap’s revenue). Since Inzap
charges 2.19%, this can add up quickly, especially because Inzap has found
that once two businesses start using Inzap between them, they typically
don’t stop.
So,
dig into your Rolodex, find all the B2B merchants to whom you’ve sold a
merchant account, and show them this great way to pump up their cash flow.
And, while you’re at it, you might consider going to all the merchants
that slammed the door in your face because they already had a merchant
account. Now you have something unique to offer.
To
learn more about Inzap, you can visit www.inzap.com
or e-mail partners@inzap.com or call (800) 753-2551. Please write to let us know how you did with this
program!
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