Empowering SMEs to Take the Friction Out of Card Payments With Suppliers

Empowering SMEs to Take the Friction Out of Card Payments With Suppliers

by September 14, 2021

Cash is king. Every business owner knows these three words by heart, and for good reason. Cash is the lifeblood of every business: more cash means better access to working capital, which means more flexibility in business operations, and a stronger buffer against black swan events.

But the most obvious problem for small business owners is that cash isn’t often as readily available as they would like.

There are a number of ways to get cash — unsecured overdrafts, working capital loans, family and friends for the truly desperate — but most of these sources require a great deal of documentation, stringent criteria, or are subject to long processing times, which isn’t ideal when you need working capital immediately.

So the next best thing is a credit card.

Why suppliers may not be accepting card payments today

Over the years, many suppliers have gotten used to receiving cheques or bank transfers, with most banks only charging a monthly, often negligible fee to process cash and cheque payments. However, this is set to change as Singapore accelerates digitisation and aims to be cheque-free by 2025.

While cheques or cash payments offer lower costs of acceptance, they’re undeniably antiquated and labour-intensive, requiring quite a bit more paperwork and processing time.

But what if you don’t have the cash on hand? You can’t exactly keep issuing IOUs to your suppliers, with the promise that you’ll have some liquidity within the next two weeks. And if suppliers don’t accept credit cards, what are you supposed to do?

How to pay non-card accepting suppliers with your Visa card

This is where ipaymy comes in.

ipaymy is a secure payment platform that lets small businesses pay their suppliers or vendors with a Visa card — even if they don’t accept cards.

How does this work? It’s just like making any other card payment. Just register your Visa card and input your supplier’s bank account details into ipaymy, then make the requisite payment.

Within two business days, ipaymy settles the payment with the payee, sidestepping any processing fees on a supplier’s part. To them, it’s just like receiving any other bank transfer — not like a typical credit card, where processing fees would have been incurred.

On your part, all you have to do is pay off your statement when it’s due.

But what if you don’t have a Visa card? Or if you do have one, but your credit limit is insufficient? As per Monetary Authority of Singapore regulations, personal credit cards have an upper limit of four times your salary, with the actual limit often being less in practice.

This is where Flex comes in. A cash management solution aimed at helping small businesses and startups, Flex’s greatest pride is in its name: flexibility. Manage your spends with Flex physical and virtual Visa Commercial Cards, and access an integrated credit line up to S$100,000.

Typically, getting loans from financial institutions requires extensive documentation and weeks of wait time, as applications have to go through a lengthy approval process. But Flex promises up to S$100,000 of interest-free credit for up to 35 days, within 48 hours of businesses submitting their documentation. No foreign exchange fees, no transaction fees.

“The sign-up process for Flex is fast and only takes minutes. With Flex on ipaymy, I can quickly access a credit line approved under 48 hours to manage my payroll expenses.”

says Jason Phua, director at Hong Ye Group.

And that’s the magic of Flex and ipaymy working in conjunction. Through ipaymy, your Flex credit line can be used to pay anyone with a basic bank account, whether it’s to suppliers, landlords, or even payroll for your own employees.

Plus, doing so is easy. A big draw of Flex is its ease of use, with a clean, clutter-free interface and myriad functionalities. Plus, a web app gives real-time transaction visibility and spending controls.

“Flex is easy to use, with a dashboard that’s easy to navigate. It makes hassle-free payments possible.”

says Lim Xinying, director at S.K. Weighing Pte Ltd.

Flex also sets itself apart with its interest conditions. Most sources of working capital loans have draconian interest conditions that put small business owners off. Some start to charge interest the moment the money is spent; others, the moment the loan is even disbursed.

But there’s none of that with Flex. As mentioned before, so long as it’s paid off within 35 days (or however long your billing period is), there is no interest incurred.

As with all credit cards, however, ipaymy does have transaction fees, even if Flex doesn’t. The former typically takes 2.25% off each transaction, which is roughly the prevailing market rate.

However, the current partnership with Flex means that making payments with a Flex Visa card through ipaymy cuts the transaction fee to just 1.5% until March next year — a good deal lower than what you’d get using other cards.

Flex on ipaymy offers a better working capital solution for small businesses today. Getting started is as simple as signing up here. Your worries about paying suppliers on time end today — never mind if they “don’t accept credit cards”.