Supplier Payment

Optimization with

Virtual Card Payments

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Store Financial at a Glance

Providing card payments across the world since 2004

Manages 650 card programs for 450 corporate payers

Issuing payments in four currencies: USD, CAD, EUR,

and GBP

Support 24/7 in English and French

Processing about $2 Billion in B2B payments in 2014

About Store Financial Select Valued Clients

?

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B2B Payments are Evolving

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2004 2007 2010 2013

48%

25%

8%

19%Very Likely

Somewhat Likely

Not at all Likely

Already Have

Source: 2013 ePayments Survey, The Association for Financial Professionals

Likelihood of Converting Major

Suppliers Payment Method from

Check to Electronic

Use of Checks for

B2B Payments

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Corporate Payments Today

Checks50%

ACH 35%

Wire Transfer

10%

P-Card5%

Typical B2B Payment Mix Optimize your Payments

Know your Company

Understand Optimization

Initiatives

Leverage Technology

Partners

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95% of current payment mix

COSTS corporates money

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What variables drive the most value for your company?

Payment Optimization

Improving DPO

Cost Per Payment

Early Pay Discounts

AP Processing

Cost

Discount Capture

Card Incentives

Trade Terms

Card Rebates

Payment Float

AP Automation

Virtual Card

Dynamic Discount

Supply Chain

Finance

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P-Card

ACH

Check

V-Card

V-Card

V-Card

Understand Optimization Initiatives

• Static or Dynamic?

Early Pay Discounts

• AP Automation, Outsourcing, Payment Types

Process/Cost Reduction

• Extending terms, Supply Chain Finance

Trade Terms

• P-Card, V-Card, what are the differences?

Card Incentives/Rebates

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Leverage Technology Partners

• Supplier Relationships

• Knowledge of Internal Process

• Business Knowledge

InternalStrengths

• Scale

• Supplier Enablement

• Technology/Security

Partner Strengths

Understand where your team excels…

…and where you can leverage a partner’s expertise.

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Begin your Optimization Effort with Cards

Physical

P-Card T&E Card

Virtual

V-CardStraight Through

Processing

Card Options:

Fastest Return on Investment

• 57% of businesses already accept cards according to recent AFP study

• 37% accept cards for transactions over $5,000

Supplier Enablement

• Optimization success is driven by supplier participation in your program

• Profitable enablement campaigns are nearly impossible without a partner

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What Is A Virtual Card?

B2B payment using

the MasterCard

payment network

Single-use card

issued to specific

supplier for specific

amount via Store

Financial’s Custom

Loop™ private-label

processing service

Secure, 16-digit

payment number…

No plastic card

needed

Less costly &

reduced risk

versus issuing

check or ACH

Universally

accepted by

any supplier

with card

acceptance

capabilities

********1234

A V-Card Is::

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Virtual Card Benefits

Generate a

rebate for

the buyer

organization

Can be used to

pay any invoice

for any payment

amount

Coexist with

P-card and

T&E card

programs

Eliminates

1099 filing

requirements

V-Card Payment Benefits::

Most secure

B2B payment

Does not require

changes to your

existing banking

relationship or

ERP system

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P-Card Payments V-Card Payments

Convenience

High Rebate /

Interchange

Limited Supplier

Acceptance

“Walking Plastic” Lower Supplier

Acceptance Fees

Targeting ACH and

Check Spend

Virtual, Single

Use Cards

Higher Supplier

Acceptance

P-Cards & V-Cards Coexist

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• Supplier conversion and enablement

• Lower supplier acceptance fees

• Virtual card management and delivery

• Buyer and supplier support

• Reconciliation tools

Store Financial Program

Differentiators

• Wrong Product: P-Card

• Not All Variables Considered

• Poorly Planned Enablement

Past Supplier Enrollment

Campaigns have failed…

…Why?

Full-Service Virtual Card Payment Program

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Su

pp

lie

r A

cc

ep

tan

ce

Ra

tes

Reduced Acceptance Cost

Not All V-Card Programs Are The Same

Standard Credit Cards and P-Cards

Large Ticket AdjustmentCapabilities

Variable Supplier Fee Structure

Private Network V-Cards

Store Financial Payment

Optimization Programs

Standard Bank

Programs

$ Highest $ Lower13

Virtual Cards allow you

to capture more rebates

at all levels of spend

Where Store Financial Virtual Cards Fit

P-Card

ACH

Wire

Check

V-Card

V-Card

V-Card

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Special Focus on Suppliers

• Detailed payment education

• Enabling card-acceptance

• Working with supplier’s merchant

acquirer to lower card acceptance costs

• Continuous supplier relationship

management

Store Financial creatively

enables supplier payments.

Supplier Benefits

• Faster payment/reduced DSO

• Lower acceptance costs

• Enhanced remittance data

• Improved reconciliation efficiency

• Enhanced security of payments

Supplier Friendly Practices

Supplier Enablement = Success

Issuing

Acquiring

Sto

re F

inancia

l Bank

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Supplier Analysis– Targeting the highest opportunities – 100% supplier targeting

is also possible.

Supplier Marketing – Buyer branded campaign with buyer’s preferred “tone.”

Store Financial on “behalf” of buyer markets and contacts all targeted suppliers.

Supplier Activation – Each supplier logs into the portal to provide credentials,

payment preferences and agrees to card acceptance.

Profile Validation – Each supplier is validated along with confirmation of card

acceptance credentials.

Profile Management – Suppliers are able to self-administer profiles. Each time a

profile is modified, the credentials are re-validated.

Payment & Remittance – Remittance data is delivered to suppliers in customized

formats to improve reconciliation efficiency.

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S u p p l i e rS e l e c t i o n

S u p p l i e rM a r k e t i n g

P r o f i l eA c t i v a t i o n

P r o f i l eV a l i d a t i o n

P r o f i l eM a n a g e m e n t

P a y m e n t & R e m i t t a n c e1 2 3 4 5 6

Supplier Enablement Process

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Sample Revenue Opportunity

SUPPLIER ENABLEMENT

Terms Total Spend 10% 20% 30% 40% 50%

< 2% Discount $ 2,328,811 $ 1,467 $ 2,934 $ 4,401 $ 5,869 $ 7,336

> 2% Discount $ 1,438,260 $ - $ - $ - $ - $ -

Pay Immediate $ 373,332,403 $ - $ - $ - $ - $ -

Within 15 Days $ 32,908,008 $ - $ - $ - $ - $ -

Within 20 Days $ 7,332,458 $ 4,619 $ 9,239 $ 13,858 $ 18,478 $ 23,097

Within 30 Days $ 444,790,441 $ 328,789 $ 657,578 $ 986,367 $ 1,315,156 $ 1,643,945

Within 35 Days $ 10,317,359 $ 9,533 $ 19,066 $ 28,600 $ 38,133 $ 47,666

Within 45 Days $ 314,290,184 $ 408,106 $ 816,212 $ 1,224,317 $ 1,632,423 $ 2,040,529

Within 60 Days $ 3,530,667 $ 5,240 $ 10,479 $ 15,719 $ 20,958 $ 26,198

Grand Total $ 1,190,268,590 $ 757,754 $ 1,515,508 $ 2,273,263 $ 3,031,017 $ 3,788,771

Incremental Borrowing Cost - 2% $ 63,994 $ 127,988 $ 191,982 $ 255,976 $ 319,970

Buyer Rebate $ 693,760 $ 1,387,521 $ 2,081,281 $ 2,775,042 $ 3,468,802

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Buyer signs NDA and provides supplier list

Store Financial conducts supplier analysis

Program plan and proposal submitted to buyer

Supplier payments optimization agreement signed

Co-develop and approve supplier enrollment campaign

Approves A/P process and ERP file integration

Buyer upfront cost = $0

Leave the rest to Store Financial

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Getting Started

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How can your company

optimize payments

and earn rebates?

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