Syosset, NY (PRWEB) September 15, 2006
While businesses have been accepting credit cards for everyday purchases for decades, there is a growing trend by the federal government to start using them as well. This is great news for companies doing business with the government because up until now Uncle Sam has always had a reputation for, (let’s say in polite terms), delayed payments?
There is a growing acceptance in many branches of government to offer this as a payment option to vendors they are doing business with. “This makes a lot of sense for the government who can now take advantage of the convenience that has been available to consumers and businesses alike. The credit card industry has discovered an interesting niche market that helps to expedite the payment processing for the government which also benefits its customers,” explains Steve Schwimmer, payment processing specialist with Renaissance Merchant Services. Some of these purchase and payment transactions, he says, can in some instances be millions of dollars.
This exciting new trend will allow more companies to tap into opportunities by seeking out business dealings with the government. Historically, many of the road blocks that prevented companies from even entering into a business relationship included layers of red tape and waiting for payment, have disappeared.
VISA, MASTERCARD and AMERICAN EXPRESS have expanded their service umbrella by reaching out to government agencies. They are now going directly to the agencies and offering training classes on the values of their services. They have effectively demonstrated to the government how their service can be of value for use in credit card processing and check conversion services. In many town municipalities you are already witnessing the acceptance of credit cards to pay for taxes.
The value to the government is the ability to track purchases with better accounting services provided by the card companies. Many government agencies have very large budgets and needs with purchasing power for goods and services exceeding a million dollars. It is no wonder credit card companies are eager to get in on this opportunity.
Special issue credit cards are set up differently than consumer cards and it is important to engage a payment processing specialist who has the knowledge of the various programs being utilized at all levels in the government. Special rate structures have been set up and come directly from the card companies themselves. For example, you are accepting business from a non-GSA companies as well as the government, there are programs which are available with preferential rates for large ticket items and services exceeding $5,000. There is a criterion which needs to be met each with different fee structures. Programs charge different amounts and as you increase your business transactions with the government different programs may be of better use to you.
If you are just getting started and are not doing big tickets, there are still excellent rates for purchasing cards and business cards. Since the government is on the same level playing field as any other customer, purchasing cards are designed to offer restriction and are issued for use with certain SIC codes. Your company may fall under one or several specific SIC codes for goods and services the government is looking to purchase from increasing market opportunities and growth.
There are a great many programs available from the credit card companies that allow merchants and service provides to offer convenient payment options. Consider the government the same as any other customer except with a world of new opportunity available. It is also important to note that not all government agencies use credit cards. This situation is not unlike when credit cards first arrived on the scene as an alternative to cash: Some people carried credit cards and some did not but eventually everyone did. The same holds true right now with the government.
Now that the need for accepting credit is established the next step is making in-roads to meeting the decision makers and building relationships which will help your business grow. Doing so takes an investment of time. Take a look at your website; make sure that when a search is performed it is found faster than others. There are companies that specialize in generating greater visibility for your products and services. It is all about getting recognized as a vendor for the government or any other target group. Very often there are trade shows specializing in soliciting business from the government and publications that carry advertisements from the government looking for vendors.
The first step is often the most difficult but it becomes easier from that point on. Work closely with a payment processor that knows the emerging market trends in the credit card industry as there are various percentage structures available. Who you use can affect your rates, shop around do your research and watch a whole new segment of your market potential open up.
Johnson Media Services
Renaissance Merchant Services
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