Have you ever heard the expression……?” Trying to bang a square peg into a round hole?” The thought of it conjures up several images. First, it is probably not the most effective strategy. If the peg does not fit, then why are you banging it into the hole in the first place. Secondly, if you have a big enough hammer and use enough strength, chances are you can get some of the peg through the hole. The latter method unlike the former will be a little messy, probably with bits of the peg scattered everywhere and leaving the person doing all the work a little sweaty and tired.
This whole process that I described reminds me a little bit of the current Credit Card offering in the B2B Payments space. The hole is very clear, it is only so big and only so much can fit through it meaning there is only so much cost a business will tolerate. Right now, the round pegs that are fitting better in the hole are Check, ACH and Wire and the square pegs are Credit and Debit. It is clear to me that the competitive forces are Check, ACH and Wire payments versus Plastic of all sorts. From the Chart Below it is easy to see the general cost differentials and that is as I have said in past blogs, part of the issue with credit cards not being universally accepted for payment in B2B.