4 min read
Key takeaways
- Credit card payments to suppliers can help increase payment efficiency, help reduce fraud exposure and generate rebates that can improve your bottom line.
- Suppliers accepting credit card payments may benefit from faster, more reliable payments and simplified receivables processing.
- Strategic supplier enablement support is crucial for maximizing card program adoption and value.
Credit card payments can transform how businesses pay suppliers while generating valuable rewards and working capital benefits. This payment strategy strengthens supplier relationships through faster settlement times while providing automated reconciliation and enhanced security controls.
How to pay suppliers with a credit card
The basic supplier payment process is straightforward—most provide a link to an online portal or interface. Once you enter your card details and complete the transaction, the payment flows through either the supplier’s direct-processing system or their chosen payment provider.
Many suppliers handle credit card payments through established payment provider relationships. The provider manages the transaction processing and settlement between you and your supplier. Work with your supplier’s preferred payment providers to set up the process.
Converting suppliers to card acceptance
Building a business case for card acceptance focuses on a few key areas:
- Payment speed and working capital: Virtual card payments are often issued upon invoice approval, while checks and ACHs process according to supplier terms—net 30 or net 60, for example. Accepting virtual cards can help suppliers increase their working capital and potentially reduce reliance on external financing. Many suppliers rank speed of payments as their highest business payment priority.1
- Process efficiency: Card payments automate reconciliation through detailed remittance data and standardized processing, helping eliminate manual workflows and reduce errors or delays.
- Reliability and security: According to the 2024 Association for Financial Professionals (AFP) Payments Fraud and Control Survey Report,2 many organizations see card payments as offering stronger protection than checks and ACH debits, which have a higher prevalence of fraud. Checks are the payment method most vulnerable to fraud, according to that report. In fact, 65% of survey respondents report that their organizations faced some kind of check fraud activity, attempted or actual.
Choosing the right type of credit card to pay suppliers
Different credit card types serve distinct business needs:
- Business credit cards can offer straightforward credit card functionality for smaller companies, typically with set spending limits. Business credit cards often rely on an individual’s credit profile and responsibility for payment.
- Corporate cards can provide enhanced controls on transactions and detailed reporting for larger organizations. They often come with corporate liability, shifting payment responsibility to the company rather than an individual.
- Virtual cards create unique card numbers for individual transactions or suppliers. This format can improve efficiency through automation from invoice to payment. It also helps prevent unauthorized charges and provides detailed data for payment tracking. Virtual cards can offer features like automated accounts payable (AP) file sourcing, enriched data insights and multiple payment delivery solutions to enhance flexibility and control. They work particularly well for businesses looking to digitize supplier payments at scale and strengthen supplier relationships.
We’re here to help
Transitioning suppliers to card payments takes time and expertise. J.P. Morgan’s Commercial Card Supplier Experience program can help by analyzing your payment data, identifying which suppliers are likely to accept cards, and either managing the supplier outreach on your behalf or equipping your team to have those conversations. We'll guide you through each step of expanding your card program.
Contact us to get started.
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/commercial-banking/legal-disclaimer for disclosures and disclaimers related to this content.
References
Pinnacle Financial Partners—2022 State of Accounts Payable
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