August 2008 BB&T, Member FDIC.

Transcription

1 Small Business Payment Solutions: Business Cards August 2008 BB&T, Member FDIC.

2 Today s Presenters: Dee Moore is Vice President and Commercial Card Sales Manager in BB&T s Bankcard and Merchant Services division. Dee has almost twenty years of banking industry experience, fifteen of which have been in credit cards. Dee is a graduate of West Virginia State University and the West Virginia School of Banking and she holds a Certified Treasury Professional certification from the Association of Financial Professionals. John Yarley is a Senior Business Leader with Visa USA s Small Business Products Department. He has more than sixteen years of broad-based experience in debit and credit card product management and merchant processing, and has previously held product management positions in a number of major U.S. banks. John holds a Master s of Business Administration degree from Ohio State University. 2

3 Agenda Small Business: The Foundation of Our Economy What Business Owners Tell Us Visa Business Products and Services How Businesses Pay Today Core Product Features Tracking Business Expenses Online Reporting Protections Zero Liability, Liability Waiver and Visa Protection Purchase Savings Other Enhancements Case Study Summary 3

4 Small Business: The Foundation of Our Economy Small businesses make up more than 99.7% of all employers. Small businesses create more than 50 percent of the non-farm private gross domestic product (GDP). The 22.9 million small businesses in the United States are located in virtually every neighborhood. Small businesses make up 97 percent of exporters and produce 29 percent of all export value. Small businesses with employees start up at a rate of more than 500,000 per year. Four years after start-up, half of all small businesses with employees remain open. Reference: U.S. Small Business Administration 4

5 Webinar Audience Question #1 The MOST critical need I am seeking to address with a business payment solution is: 1. Cash flow 2. Vendor acceptance 3. Rewards and purchase savings 4. Flexible reporting 5. Security 5

6 What Business Owners Tell Us Low Small Business Owner Engagement High Small Business Owners are seeking compelling value propositions from their Business Cards Cash Flow Solutions A comprehensive payment solution set to address Small Business cash flow needs Business Check Card and Business Credit Cards Coverage & Utility Rewards & Purchasing Savings Rational Coverage & Utility Cash flow Solutions Emotional Elements Efficiency Tools Small Business Owner Benefits Emotional More than 7.4 million Visa merchant outlets offer extensive coverage and utility to Small Business cardholders Rewards & Purchasing Savings Rewards Programs and Merchant Offers provide compelling rewards and purchase savings for Small Business Visa cardholders Efficiency Tools Online Reporting Tools give business owners the capability to: a. review account statements for the past 18 months b. Receive alerts to manage account c. view an image of monthly paper statement d. download transaction information to financial software Emotional Elements Security features such as Visa s Zero Liability and card enhancements such as Purchase Security and Extended Protection 6

7 Visa Business Products and Services Payment Flexibility Visa Business Credit Card Visa Business Line of Credit Visa Business Check Card Provides convenience and a grace period for routine business purchases Provides access to short-term working capital for cash flow fluctuations and peace of mind Provides Small Business Owners and their authorized employees access to funds from Small Business checking accounts Business Differentiators Bank Online Reporting Tools Web-based reporting solutions that allow expense monitoring and streamline accounting Liability Waiver Protection from employee misuse Merchant Offers Merchant discounts and special offers in broad expense categories Visa Rewards Rewards earned on everyday business purchases across payment products Available on all Business Card products, cardholder availability subject to issuer offer 7

8 Webinar Audience Question #2 How do you now pay for the majority of your business purchases? 1. Check 2. Credit Card 3. Cash 4. Debit Card 5. Other 8

9 How Businesses Pay Today Checks are the primary competitor to business cards within small business wallets Avg. # of Transactions Avg. Monthly Spending Median Ticket Size Check 95% 14.2 $14,766 $291 GPC Cards General Purpose Cards *Non-Bank DDA Cash **Bank DDA 46% 42% 39% 38% 7.8 $2,993 $ $4,114 $ $769 $ $4,963 $300 Debit/ATM Card Other 14% 23% 7.9 $1,548 $ $3,206 $197 *Non-Bank DDA 0% payments 10% 20% include 30% those 40% arranged 50% 60% directly 70% with 80% vendor 90% 100% or PayPal, or through other online bill payment services **Bank DDA payments include those arranged through the bank s online bill payment service and those arranged with the bank offline Source: Visa Small Business Payment Panel 4Q 06-1Q 07 9

10 Business Spending Growth Trends Small business spending reached $4.7T in 2005, with an additional $1T forecasted growth in the next 5 years Core Small Business Non-Payroll Spending Growth $5.7T $125B T&E Rent All Other Raw Materials and Inventory Maintenance, Repair, and Operations $4.0T $291B $366B $652B $1,222B $80B $4.7T $412B $420B $800B $1,338B $99B $586B $514B $918B $1,596B e.g., Drywall e.g., Cleaning Services Core Business Services $1,348B $1,610B $1,969B e.g., Database Management (f) Source: Global Insight, Visa USA Product Development and Management, Visa USA Interchange Strategies 10

11 Webinar Audience Question #3 The ONE key feature I am looking for in a Business Payment Solution is: 1. Flexible reporting 2. Security and protection 3. Purchase savings and/or reward programs 4. Low fees 5. All of the above are very important to me 11

12 Core Product Features: Tracking Business Expenses Quickly access individual account information online Review account statements for the past 18 months Benefit from same-day credit for payments made before 2 p.m. ET Sign up for alerts to help manage accounts View an image of monthly paper statements Download transaction information to financial software 12

13 Core Product Features: Protections Zero Liability: No liability for fraudulent purchases; applies to your BB&T Business Credit Card Liability Waiver: Protection from employee misuse up to $100,000* per cardholder Visa Protections: Dispute resolution process * See card disclosure for details; requires employee termination 13

14 Core Product Features: Purchase Savings Discounts online coupons Suites of discounts are updated every six months Choice Hotels Car Rentals Personal Computers Wireless Products Program Details / /VisaHome02.swf ev_sbdisc_click&rand=

15 Core Product Features: Enhancements Auto Rental Collision Damage Waiver Automatic coverage on rental vehicles for damage due to collision or theft Purchase Security and Extended Protection Purchase Security will replace, repair, or fully reimburse covered cardholders up to a maximum of $10,000 in the event of theft or certain types of damage Extended Protection doubles the time period of the original manufacturer s written U.S. repair warranty up to one full year on warranties of 3 years or less Travel and Emergency Assistance Coordination of cardholder s medical, legal, and travel services while away from home Additional services offered: Medical Referral Assistance, Prescription Assistance, Legal Referral Assistance, Emergency Ticket Replacement and Emergency Translation Service Luggage Reimbursement Reimbursement for cardholders and families for the replacement cost of checked or carry-on luggage and its contents * See card disclosure for details and limitations 15

16 Business Card: Case Study 16

17 Case Study Client Profile New business client looking for a NO COST payment solution designed to utilize technology to streamline the business procurement and travel expense process, while providing added security, visibility and benefits to the business. Focus on Travel, Food Services and Computer/Office Supplies/Postage. 17

18 Case Study Current Scenario The business processes hundreds of checks and pages of paper for employee reimbursement of petty cash and travel expenses. Purchase of fuel, local items and food services are paid by check or on PO/store account. Computer hardware/services/software, office supplies and postage are paid by check and are limited to specific providers that will accept check/po payment. 18

19 Case Study Product Solution Benefits realized when using a Business Card as payment option: Increased/extended cash flow business receives cash management benefits not offered with checks. Multiple items are charged on the Business Card for a consolidated company settlement each month. Business maintains a higher average daily balance in its operating account to offset bank fees and is able to sweep out funds to earn additional interest income. Increased security and control business has greater control over monthly expenses against its monthly budgeted amount. Business able to monitor purchasing compliance and usage of contracted/preferred vendors data used to consolidate vendors and request vendor discounts. Reduction of paperwork and check issuance business able to reduce paper and check costs including check stock and postage costs. Rewards incentive business can participate in a no cost Business Rewards program not offered with checks. 19

20 Case Study Implementation Client selected and implemented a Business Card program in January 2008 $100,000 credit line 20 cards issued to key department managers and procurement/ traveling employees In 5 months, the business program accumulated 620 transactions for $103,000 in purchases. 20

21 Case Study Immediate Benefits Eliminates employee check reimbursement of petty cash and travel. Employees follow normal guidelines for petty cash and travel expenses, then pay with the Business Card. Process is convenient for the employee; the business is able to monitor and track expenses; and Accounts Payable no longer issues multiple checks to employees for expense reimbursement. Pay for fuel, local items and food services on the Business Card rather than with checks or multiple cards. Provides the business added security layers business is able to track expenses via an online, real-time monitoring system. Reduces the number of checks written by Accounts Payable and streamlines paperwork. Plus, the business earns extended cash flow and Reward points. Pay for computer hardware, services and software, office supplies and postage using the Business Card, for convenience and flexibility. The business receives the best value for its dollar by being able to purchase locally, globally and via the Internet. Direct debit can be set up as a clearing account where the business can review, approve and pay monthly expenses. 21

22 Case Study Results Reduction of checks by 620 Increased cash flow/float by $10,000 to $15,000 based on extension of payment terms Greater security and monitoring of business transaction data online Convenience, tracking and accountability of business employee management Added travel benefits to the business travel and emergency assistance services, travel and accident insurance and auto rental collision damage waiver insurance Single payment to bank replaces multiple monthly payments to vendors Accounts Payable can focus on expense analysis and other initiatives to increase productivity/reduce spending 22

23 Case Study Annual Savings In 5 months, the business program accumulated 620 transactions for $103,000 in purchases. Top 3 categories of card use include: $26,000, Food $20,000, and $9,700. Savings: Reduction in check usage by 620, at a conservative cost of $10 (Treasury Studies have determined the cost of issuing a check is $12). $6,200 in savings YTD. Earnings: Extended cash flow/float of $10,000 monthly. If invested short-term at 2% for 30 days for 5 months, added $83 to interest income. Business Rewards of 103,000 points to be redeemed by the business. Online/real time transaction data, with downloadable capability to the business accounting software to better monitor budgets in real time and perform financial reporting/data analysis. Data exported electronically saving time for keying data into the accounting software. Cost: NONE!! This client selected a NO COST program, to include all tools and resources to manage a successful card program! Overall Potential Annual Value $12,000 saved in check costs with $200 earned in interest income and more than 200,000 reward points accumulated! 23

24 Summary Visa Business Cards Check Card and Credit Card: - Save time - Save money - Help you manage your payments So you can focus on your passion: your business! 24

25 Thank You for Participating Today! For Business Credit Card information, please: Call our Commercial Card Client Support Center at Visit our website at Drop by one of our conveniently located banking centers For Business Check Card information, please: Call BANK BBT (option 4 - option 2) Visit our website Drop by one of our conveniently located banking centers 25