Payment optimization for supplier spend

Part I
PAYMENT OPTIMIZATION
THE HOW, THE WHY AND THE WHO
Presented for FENG, the Financial Executive Networking Group

TODAY’S PRESENTER
Doug Seaberg
Director of Business Development
© 2017 EML Payments Europe Limited. All rights reserved. | www.EMLpayments.com

• About EML
• Current Payment Landscape & Ecosystem
• Identifying the Problem
• Identifying the Solution
AGENDA

EML offers innovative payment technology
solutions for payouts, gifts, incentives and
rewards, and supplier payments. We issue
mobile, physical and virtual card solutions to
some of the largest corporate brands
around the world, processing billions of
dollars in payments each year.
Click below to visit us:
• Certified processor and program manager
• Managing more than 850 card programs for 500+
customers
• In-house 24/7 multilingual customer service
• 14 years of payment experience
• Certified by Visa®, MasterCard® and Discover®
• PCI compliant and SSAE-18 certified
• Secure platform with 99.99% uptime
• In-house development team
• In-house, experienced supplier relationship managers
www.emlpayments.com
ABOUT EML

CURRENT PAYMENT LANDSCAPE
How the Payment Industry Currently Operates

Accounts Payable
Process Payments
Roles and Responsibilities
Who Does What In Today’s Payment Industry
Finance
Budget, Audit, Tax
Treasury
Manage Cash Flow
Summary of Goals:
• Reduce manual processes in general
• Reduce the number checks written
• Increase organizational efficiency associated with supplier payments
• Simply the process for paying suppliers

The Current Payment Industry
Where We Are After Years of Innovation
Online Banking Invoice Automation
Cloud Based
Accounting
(ERP)
Payment
Optimization

CURRENT PAYMENT ECOSYSTEM
Who Specializes in What
Payment Methods Payment Services
Created by the banking system Created by non-bank partners
Check
ACH
Wire
Cards
Merchant Acquiring
Gift Cards
Online Checkout
P2P Payments
Banking System Examples
• Chase
• Citi
• Bank of America
• Wells Fargo
National Examples
• Apple Pay
• PayPal
• Square
• Stripe
BANKING SYSTEM NON-BANK PAYMENT PROVIDERS

IDENTIFYING THE PROBLEM
Why is Payment Optimization Important?

WHY ARE COMPANIES NOT OPTIMIZED
The Three Main Excuses for Avoiding Payment Optimization
Most companies do not
understand the value of
payment optimization
Companies rely on limited
internal resources instead
of using third-party
providers
Change adverse -
comfortable with the way it
has always been done
Bad experiences with
purchasing cards in the past
1. EDUCATION 2 .COMPLACENCY 3. PAST EXPERIENCES

SUPPLIER PAYMENT WITHOUT OPTIMIZATION
What is the Cost Per Transaction of Avoiding Change
* 2015 Electronic Accounts Payable Benchmark Survey Results
$31 USD per transaction
$9 USD per transaction
Traditional Check Payment
EAP Payment
(Utilizing Non-bank Payment Providers)

Treasury Management Offerings
WHY BANKS FALL SHORT
And Where You Fit into Today’s Payment Ecosystem
Remote deposits
Image lockbox layer
ATM business deposit
cards
Depository+
Cash vault layer
Merchant Services
ACH and wire payments
Card solutions
Check payments
Payroll solutions
International payments
Account structures
Automated sweeps
Investment solutions
Zero balance
accounts layer
Cash flow advisory
Online Services
Account activity Alerts
Mobile and Text Banking
Technical support
Profile Layer
ACH
blocks/authorizations
Account reconciliation
Online/mobile security
With all these offerings how important is your payment optimization to your bank?

IDENTIFYING THE SOLUTION
Analyzing Supplier Spend

FINDING A PARTNER IN PAYMENT OPTIMIZATION
Advantages of Utilizing A Third Party
THIRD-PARTY PAYMENT PROVIDER
Supplier Payment Optimization
Included Services
Supplier Enrollment1
Payment Delivery2
Payment Reconciliation3
Ongoing Supplier Support4
Supplier Payment Portals5
Escheat6
1099 Filling7
Compliant8

FINDING A PAYMENT OPTIMIZATION PARTNER
Advantages of Utilizing Third-Party Processors
AR (SUPPLIER) DEMANDS ON AP TEAM
“When are you going to pay me?”
“What amount am I getting?”
Accounts payable’s role is to
process payments
Time and system constraints
cause inefficacies
AP doesn’t have a way to get
the banking information and a
way to keep it and maintain it

IDENTIFYING YOUR POTENTIAL
How You Can Start Paying the Right Suppliers the Right Way
Government
(Taxes)
Payroll
Supplier
Spend
Non-strategic
Suppliers
Core Suppliers
Strategic
Suppliers
Total Spend Eligible Spend
Payment Optimization Rebate Example
Real World Case Study
Total Spend $1,554,679,981
Total Suppliers 6,609
Total Payments 143,649
Targeted Converted Spend $198,517,810
Targeted Converted Suppliers 2,402
Targeted Converted Payments 36,140
Estimated Rebate $3,454,210
Is your
payment type
appropriate
for your
supplier
relationship?

Total Suppliers Total Spend Total Payments
6,609 $1,554,679,981 143,649
Card Eligibility # of Suppliers # of Payments Spend
Eligible 5,797 104,908 $1,315,106,205
Ineligible 812 38,741 $239,573,776
Grand Total 6,609 143,649 $1,554,679,981
$1,315,106,205
$239,573,776
Eligible
Ineligible
Eligible Payments Percentage 73%
Eligible Supplier Percentage 88%
Eligible Spend Percentage 85%
ELIGIBILITY EXAMPLE
High Level Analysis of Payments
Ineligible payment examples: payroll, tax, insurance, benefits, municipalities, cities,

Group
Target
Conversion
Converted
Spend
Converted
Suppliers
Converted
Payments
Converted Avg.
Payment
Est. Rebate
High Confidence Group 50% 62341250 1000 10140 6148.24 $1,084,738
Medium Confidence Group 25% 86,694,769 428 15000 5,779.65 $1,508,489
Low Confidence Group 10% 36690712 542 7000 5,241.53 $638,418
Unmatched Group 3% 12791079 432 4000 $3,197.77 $222,565
Grand Total 198517810 2402 36140 $5,493.07 $3,454,210
CONVERSION ESTIMATE
Likely Supplier Conversion to Optimal Payment Methods
INTERESTED IN CALCULATING YOUR BUSINESS’S REBATE AND COST SAVINGS?
EML’S REBATE CALCULATOR

RECAP
Identifying the Problem
• Innovation has stopped short
• Banks have low interest in payment
optimization
• Limited knowledge on supplier payment
optimization
• Internal complacency
• Poor past experience
Identifying the Solution
• Third-party processors specialize in supplier
payment optimization
• Mutually beneficial relationships
• Analysis of current spend to discover potential
• Utilizing third-party processor’s innovation to
‘finish the race’

HAVE QUESTIONS?
WE’D LOVE TO HEAR FROM YOU
CLICK HERE TO CONTACT EML
How do I start a
payment
optimization
program?
Can you help me
“sell” payment
optimization to
my leadership?
What’s my
business’s
potential rebate
opportunity?

Doug Seaberg
dseaberg@emlpayments.com
Business Development Director
Part II
PAYMENT OPTIMIZATION
Executing on the Analysis
Join Us Next Month

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