PSP Angels VIKTORIA SOLTESZ Founder of PSP Angels
Does your company have a payment strategy? Every company has a detailed strategy which usually covers everything from sales to HR. Handing all finances is usually the job of the accounts department… but who is responsible for the payment strategy? If you wait for your Chief Accountant or CFO to spare some time from the daily tasks of the reporting on accounts receivable /payable in order to set up such strategy, your company might be in trouble. Accountants are amazing in accounting. But online payments (mainly which involves high risk) became a special industry on its own, and payment planning demands its own attention. Collecting funds “as they come” and allowing them to flow by themselves is a classic business mistake, which might cause serious delays, lost revenue opportunities and unnecessary costs for your business. To understand everything about the incoming and outgoing funds we need to answer the following questions: • how much • how often • where from or to • what currency • and whom pays or we pay to Answering these questions honestly can make a significant difference on your financial stability and profitability. With an effective payment strategy, every incoming our outgoing amount becomes an opportunity to maximise profit, while reducing risk and optimise workflows. Without strategy, your cash flow, liquidity and customer satisfaction might be taking an unnecessary risk or cost.
What is a payment strategy An effective payment strategy is a series of fully inGAME CHANGERS Issue #35
formed decision about your payment providers: their risk, costs, and full range of services. As online payments are booming, high risk solutions are changing all the time, so you need to evaluate all opportunities on the market who has the risk appetite to accept your business. Surprisingly, the fees are subject to rapid changes too. It might be the payment provider who is changing their fees, or it could be your company, which has grown significantly in certain areas in the last 3 to 4 months, whereby more volume means lower fees; you might be eligible for a discount which you are not taking advantage of. To make sure that you are having a cost-effective yet safe solution, you will always need to have an up-to-date information about the payment market. This information and the payment decisions shall be then monitored and revised periodically, following the latest market trends, and benchmarking your competitors’ solutions. The payments strategy not only considers all the factors which can affect how the money is moved between the different payment providers, i.e.. when and how the payment is received or spent but also how and where the money is kept before being sent further. Knowing how long are we “parking” our funds before we use them (or pay out the shareholders or clients) and what are the exact fees, opportunities and risks on these periods are also critical to achieve maximum operational effectiveness. For example, if you only want to reduce your costs, you may want a payment strategy that takes advantage of multiple providers and a cashier system which allows cascading from the cheapest to the more expensive solutions. However, is you are losing a significant amount of deposits at the checkout, you might want to have a look at the
