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Blog April 2024

Cashing Out on Cash and Checks: A new Digital Supplier Payment Era for Scrap Metal Recyclers

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Conor Dowd

AMCS Global Head of Marketing

Making payments to scrap metal suppliers for purchases has never been easy with cash and checks dominating as the most common payment methods. While they score high on familiarity, they bring significant challenges including high processing costs, rising fraud, lack of auditability and increasing regulatory compliance.

Costs: The full cost of managing cash pay outs are high and are estimated at 5%+ of the transaction value when the full costs are taken into consideration. These include security costs (secure transport, safes, onsite ATMs etc.) and bank fees. Moreover, cash handling takes valuable staff time and resources of recyclers that could be deployed to more profitable activities.

Check payments to suppliers are not much cheaper at $15+ per check issue and cost even more when rising check fraud is included.

Rising Fraud: With cash payments there is always the risk of theft, loss, and counterfeit bills. Check fraud is also on the rise with higher incidences reported for forged, altered, and counterfeited checks as fraudsters have turned their attention from targeting increasingly secure digital card payments to exploiting vulnerabilities in check payments. While anti-fraud services such as Positive Pay can help prevent check fraud, they also add to costs and add to the administration burden and costs for an operator and ideally require integration with your ERP software to work best.

Auditability: Cash and check payouts to suppliers can be hard to track and reconcile with invoices and the associated manual entry increases the risk of human error and time spent on reconciling discrepancies. There is often a delay in reflecting both types of transactions in financial records and this means that an operator does not always have an up to date and true picture of their finances. 

Increasing Regulatory Compliance: There is a growing tightening of the compliance regulations that govern pay outs at scale across several states as there is an increased focus on preventing both metal theft and money laundering. This is part of a wider international trend with Europe introducing new Anti-Money Laundering legislation squeezing cash payments at the scale and the United Kingdom banning cash payments back in 2014.

These challenges, coupled with the rapid adoption of digital payment solutions across the market point to a clear trajectory: the transition of supplier payments from paper to digital in not just inevitable but will gain considerable momentum over the next two years.

With AMCS Pay for Supplier Payments, AMCS is looking to help operators make the journey from conventional supplier payments to a new generation of integrated and digital payment methods. 

AMCS Pay for Supplier Payments offers an integrated, convenient, and secure way to pay suppliers providing both support for both todays’ conventional methods (cash, checks with Positive Pay and ACH) as well as for emerging digital payment methods such as instant pay outs to debit cards, pre-paid and re-loadable cards, and digital wallets.

It means that suppliers can be paid instantly, anytime, and anywhere (not just at the scale) with their preferred instant payment method, increasing their loyalty to your company. 

Payments to suppliers are embedded into the AMCS Platform for Metal Recycling workflows, making it easy to use as well as to control, approve, audit, and reconcile payments.  

One of the unique benefits is the ability to view in real-time all the payment transactions with associated invoices on a single embedded AMCS Pay account, increasing control and visibility over all payment operations. 

AMCS Pay for Supplier Payments is part of the wider AMCS Pay family of solutions that make it easier for operators both to make and take payments, anytime, anywhere across all channels with a full range of digital methods.

‘We are keen to partner with metal recycling operators wherever they are on their journey to digitalize their pay outs to suppliers. The benefits of AMCS Pay are clear – lower processing costs, increased security, auditability, regulatory compliance, and future proofing your business for the world of digital payments' - Sean McGrath, AMCS Head of Product, Payment

Learn more about AMCS Pay for Supplier Payments at the AMCS Booth #2146 at ISRI 2024!

AMCS Pay for Supplier Payments

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