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January 25, 2010updated 04 Apr 2017 4:17pm

American Express muscles in on US online bill payments market

In a move to strengthen its leadership of the small-business market, American Express OPEN has unveiled an online invoicing and payments solution to help US business owners maximise cash flow.

By EPI editorial

In a move to strengthen its leadership of the small-business market, American Express OPEN has unveiled an online invoicing and payments solution to help US business owners maximise cash flow.

AcceptPay allows business owners to create, send and track invoices at one internet site. Through AcceptPay, customers can pay the invoice through a variety of methods, including major credit and debit cards, eChecks cash, or cheques. Resulting payments are deposited directly into the business owner's bank account.

“The economic crisis has revealed a common need among nearly all small businesses: to get paid faster,” Mary Ann Fitzmaurice Reilly, senior vice-president of American Express OPEN told EPI. “E-billing reduces the time it takes to get paid; it also can cut down on time spent processing invoices and payments.

“There is also an opportunity cost associated with manual invoicing systems – they take up time that could be spent on revenue-driving activities and are often prone to human error. Online invoicing and payment acceptance solutions improve efficiencies and reduce risks.”

Significant cash flow issue

According to the American Express OPEN small business monitor, a semi-annual survey of business owners, 60 percent have cash flow concerns, with 20 percent of owners reporting that the ability to pay bills on time is the most significant cash flow issue they face today.

In addition, 32 percent of small business owners are most likely to be more aggressive in collecting accounts receivable in order to improve cash flow – the most popular tactic of those offered in the survey.

“The economic crisis has made getting paid faster a top priority for small business owners,” Reilly added.

“According to our latest research, the majority of small businesses report are having cash flow concerns. Small businesses are often caught between their suppliers allowing fewer days to pay, and their end customers taking longer to pay.

“In essence, small business owners have been caught in the middle of this economic crisis.”

Among cash flow concerns, the biggest worry for business owners overall is the ability to pay bills on time (17 percent). One-quarter of business owners in the retail sector are concerned about the ability to pay bills on time, versus 16 percent of manufacturers and 10 percent of services companies.

Additional concerns for businesses include accounts receivable (15 percent); having enough cash to win new business (10 percent); the ability to meet payroll (9 percent); and the ability to accurately track cash flow (7 percent). Less than one-quarter of all business owners (24 percent) believe their accounts receivables are too high; however, 6-in-10 entrepreneurs (61 percent) are concerned about having cash available to pay bills over the next six months.

Muliple payments options

For smaller businesses lacking a unified payments solution, AcceptPay claims to offer benefits found only in the services offered to much larger enterprises. Not only does AcceptPay offer faster payments and the ability to choose multiple online payment options, but it also the ability to create and send invoices, as well as track and organise invoices, payments and outstanding receivables online.

Business owners can also track and view invoices and receivables via automated or custom reports. All of these records can be seamlessly integrated into QuickBooks software.

Every business owner, whether or not they are an OPEN card member, is eligible to apply for AcceptPay. There is no set-up fee, and the service is priced at $20 a month. Any business owner can also register for AcceptPay Lite, which is a free invoicing-only solution that provides the opportunity to test the product.

To design AcceptPay, American Express partnered with PaySimple, a Denver, Colorado-based provider of on-demand electronic payment-software services for small businesses. American Express and PaySimple worked with business owners and used feedback from product test groups to create the product features.

Several of those business owners appear in a new television advert featuring real business owners asking each other questions about how to better run their businesses.

The national ad underlines the primary thing small business owners want to know – how to get paid faster – and highlights AcceptPay as a solution for business owners looking to turn the page on a challenging 2009.

Small business owners are also encouraged to ask their own questions and join the conversation by logging on to OpenForum.com, an online resource and networking site for business owners.

Choice proliferating

American Express is not alone in offering an increasingly diverse portfolio of payments-related products to the small business sector. A number of players are marketing ways for small businesses to make their bill payment processes faster, easier and more convenient.

iPay Technologies, for example, has targeted small businesses with Biz 2.0, an online bill pay product with tools that connect bill payment, payroll deposits and invoicing into a single solution. Like AcceptPay, Biz 2.0 integrates bill payment processes with electronic invoice generation. It also gives small businesses the ability to manage their payables and receivables within one single bill pay solution.

More than 400 banks and credit unions already offer the solution to small businesses nationwide.

According to recent reports by consultancies Celent and The Aite Group, small businesses are increasingly selecting their banking relationships based on online banking features and usability. In a Celent study, 60 percent of small business respondents said they were willing to switch from popular software products and accounting to bank-based tools if they were offered.

The arguments for such products are quite clear in the middle of an economic downturn. During a contraction as severe as this, speeding up the order-to-cash cycle by collecting faster is the name of the game – and electronic billing and the ability to receive payments electronically can deliver this.

In addition, such solutions are increasingly affordable, sophisticated and customisable, providing a return on investment that will sell itself.

Charles Davis

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