Flipping a Cost-Center Into a Profit-Center via Card Payment

In Business, We Can Choose to Play Smart, Not Play Hard

Everybody knows payment comes with a cost, especially when using financing facilities to prolong the payment term — financing via an unsecured loan product is expensive. So financing and payment infrastructure exist to serve the payor better on security, speed, and price relative to payment speed or tenure. Whoever can provide payment and financing at ease, with fair prices and trusted rails, wins the market.

A 4PL company successfully leveraged technology to turn payment from a cost center into a profit center. It outsources several 3PL players by logistics specialty; those 3PLs use their own fleet plus local transporters. Local transporters must be paid in advance to perform deliveries, but 3PL companies offer their clients a term of payment to meet client requirements — a common practice in logistics that forces 3PL companies to balance assets and cash flow.

The Opportunity Hiding in B2B Payment Terms

For 3PL companies, investing in more assets is risky long term — it complicates the business process via maintenance and depreciation and raises fixed costs. But in some cases they cannot handle the cash flow needed to ask local transporters to perform deliveries for big projects, and need flexibility in receiving cash even at the cost of margin. Financing from a bank is too slow, and multi-finance or peer-to-peer lending carries too high a cost of funds. What can be done is simply: (1) offer an early payment discount to their buyer, and (2) pay the local transporter in advance using credit card to extend the payment term. Many just don't know option two is available, even though the local transporter itself doesn't accept card payments.

The 4PL company, as a client of the 3PL, leverages exactly this. They pay in advance — around 14 to 30 days ahead, depending on the 3PL — if the early payment discount meets their requirement. Despite having no cash in hand, they pay via credit card and cover a service-fee percentage; since the 3PL discount is larger than that fee, the spread becomes profit. The more volume paid in advance, the more profit, without sacrificing cash flow. By adjusting the payment date, the company also enjoys a prolonged bank payment term of up to 45 days — an extra 15–31 days beyond what the 4PL would otherwise get.

Leveraging More Bonus on a Supply Chain Digital Platform

Paper can facilitate card payments to suppliers even if they don't accept card payments themselves. Multiple invoices can be paid at once, keeping the payment process seamless and scalable, with automatic reconciliation and real-time notification for both payor and receiver — so the supplier knows their invoice has been paid and settled on time.

It's not just the payables side: Paper's invoicing and payment solutions also apply to receivables, where a customer's invoice can be paid via multiple methods, including most major Indonesian banks and credit cards — letting a Paper user offer their own customers extended payment terms via card payment.

All of this commercial benefit comes wrapped in technology that eases finance, procurement, and sales operations by making procure-to-pay and order-to-cash seamless and automated, resulting in faster invoice processing, reduced operational effort, decreased DSO, and minimized fraud.