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Reap allows you to pay any recipient using any credit card, sending funds securely from the card directly to the recipient’s bank account, without the recipient needing to set up any kind of merchant account, processor, payment gateway or point-of-sale device.
We have received a lot of questions in the past months about how this works, and so today I wanted to explain more about the model behind the scenes.
The process itself is called “Buyer-Initiated Payments” or “Push Payments”. To understand why this differs from traditional credit card payments, let’s first understand how the process used to work.

Buyer initiated payments: Increasing payment terms & optimizing working capital

With conventional credit card processing, the recipient (your supplier, employee, or landlord) must have some kind of technology to be able to collect and process the card account information from the buyer (cardholder) and combine this with other transaction information, such as the sale amount, and certain required seller details. Then the seller enters this transaction information into their card acceptance technology, either a point-of-sale device, or online payment gateway to be delivered into the card network (think Visa, Mastercard or American Express). If all goes according to plan, the seller will eventually be funded for the correct amount of the sale (net of the processing fees), and the buyer’s credit card will be billed for that same amount.

But with Buyer-Initated Payments (BIP), the process is exactly what it sounds like. Simple payments are created by the buyer, and the recipient (seller) would just receive the funds. This means the buyer sends funds from a credit card, to anywhere, usually a bank account for a specific payment. So the card processing technology would be used by the buyer, not the seller. This suits any payments that you’d want to make with credit, but the supplier does not accept credit.


The benefit for the buyers

But why would a buyer want to start a payment? There is main reason: so that buyers can take advantage of the administrative and financial benefits associated with using your corporate or personal card for commercial purposes.

1. Improve working capital

Using the BIP, buyers can access the benefit of the deferred payment cycle of a credit card, with extended cash for up to 58 days. If all of your expenses were deferred this way, that means you can use that 58 days of extra cash for flexibility when maybe a customer is slow in paying you. We talk about the benefits of this cash flow in this post.

2. Simplify payment processes

No more managing payments over writing paper cheques, keeping track of which invoices have been paid or not, finding mailing addresses and sending international telegraphic transfers. You can now pay expense with a card on a laptop, tablet or phone, even internationally.

3. Earn rewards and rebates

When you spend on the card for expenses, take advantage of the travel miles and reward schemes that come with you card. For example, a paying HKD 20,000 in rent on a Standard Chartered AsiaMiles Mastercard will get you 5,000 AsiaMiles that you can use for your next trip to Bali.

What’s in it for suppliers?

With BIP, the transaction process for the seller is reduced to two simple functions — (1) sending the invoice and (2) receiving the payment. It can’t get any easier than that.

1. Straight through processing for simple collection

With BIP, the seller does … well … nothing, except for having a bank account to collect the payment.. Aside from sending a bill (invoice) to the buyer, which usually occurs regardless of the payment medium.

2. Detailed data on inward payments

Automated and detailed remittance data speeds up reconciliation process, all information that can be found on a bank statement. Suppliers no longer need to call you, the buyer, to find out if you’ve mailed a cheque anymore, or if you wrote the invoice number in the memo field.

3. Reach more customers with flexible payment methods

By providing the option of credit card payments to buyers, suppliers are able to broaden their reach, especially as it relates to international customers. Buyers who are strapped for cash or who do not have access to a bank account can take advantage of the global credit card network and get access to different suppliers.

Where has BIP been?

Given that there are benefits for both buyers and sellers, why haven’t we seen more of this model? Well actually this model has actually been around for some time. In North America, as well as Europe, the ability to pay directly with BIP is well established and enables growth for many small businesses to improve their payment process and access cash flow. Established and trusted platforms such as Plastiq and Billhop have been serving businesses for many years.

And now Reap wants to provide the same ability to pay for SMEs here in Hong Kong and Singapore. Our platform is available now, so there’s no better time to sign up for free and try it out to see how it can change your business

Reap isn’t just a better way to pay, it’s a better engine for driving profits from better cash management, reducing expenses and errors associated with paper payment processing, simplifying reconciliation and improving efficiency.

The benefit for the buyers

But why would a buyer want to start a payment? There is main reason: so that buyers can take advantage of the administrative and financial benefits associated with using your corporate or personal card for commercial purposes.

1. Improve working capital

Using the BIP, buyers can access the benefit of the deferred payment cycle of a credit card, with extended cash for up to 58 days. If all of your expenses were deferred this way, that means you can use that 58 days of extra cash for flexibility when maybe a customer is slow in paying you. We talk about the benefits of this cash flow in this post.

2. Simplify payment processes

No more managing payments over writing  paper cheques, keeping track of which invoices have been paid or not, finding mailing addresses and sending international telegraphic transfers. You can now pay expense with a card on a laptop, tablet or phone, even internationally.

3. Earn rewards and rebates

When you spend on the card for expenses, take advantage of the travel miles and reward schemes that come with you card. For example, a paying HKD 20,000 in rent on a Standard Chartered AsiaMiles Mastercard will get you 5,000 AsiaMiles that you can use for your next trip to Bali.

What’s in it for suppliers?

With BIP, the transaction process for the seller is reduced to two simple functions — (1) sending the invoice and (2) receiving the payment. It can’t get any easier than that.

1. Straight through processing for simple collection

With BIP, the seller does … well … nothing, except for having a bank account to collect the payment.. Aside from sending a bill (invoice) to the buyer, which usually occurs regardless of the payment medium.

2. Detailed data on inward payments

Automated and detailed remittance data speeds up reconciliation process, all information that can be found on a bank statement. Suppliers no longer need to call you, the buyer, to find out if you’ve mailed a cheque anymore, or if you wrote the invoice number in the memo field.

3. Reach more customers with flexible payment methods

By providing the option of credit card payments to buyers, suppliers are able to broaden their reach, especially as it relates to international customers. Buyers who are strapped for cash or who do not have access to a bank account can take advantage of the global credit card network and get access to different suppliers.

Where has BIP been?

Given that there are benefits for both buyers and sellers, why haven’t we seen more of this model? Well actually this model has actually been around for some time. In North America, as well as Europe, the ability to pay directly with BIP is well established and enables growth for many small businesses to improve their payment process and access cash flow. Established and trusted platforms such as Plastiq and Billhop have been serving businesses for many years.

And now Reap wants to provide the same ability to pay for SMEs here in Hong Kong and Singapore. Our platform is available now, so there’s no better time to sign up for free and try it out to see how it can change your business

Reap isn’t just a better way to pay, it’s a better engine for driving profits from better cash management, reducing expenses and errors associated with paper payment processing, simplifying reconciliation and improving efficiency.

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