Small businesses are often described as “digitally immature” when it comes to their finances.
There are huge financial consequences for using legacy payments methods. In fact, a recent MarketWire survey found that on average, manually-processed invoices cost $30, and errors with invoices can cost upwards of $53 to fix. No matter the size of business, this is too much money.
As a result, Chase is trying to make payments and transfers easier for SMBs by introducing a new partnership with Bill.com. The collaboration, aimed at improving Chase’s outdated B2B payments system, promises to create “a simpler and faster way for businesses to send and receive invoices and payments.” While things may be looking up, the project is still in its infancy.
Considering the present reality and possible future of Chase’s platform, we’ve created a pro and con list to help you decide what is best for your business and money.
Chase’s business resources
Chase has been managing the finances of businesses large and small for a long time, and they’ve gotten pretty good at it. The Chase website boasts a huge “Business Resource Center” section, allowing SMBs to access articles, resources, and tools to help improve the inner workings of your organization.
For example, Chase’s “Payments Optimization Model” tool is a web-based calculator that cuts down on losses accumulated from physical checks and manual transfers. It takes these cost of doing so into account, and determines how much could be saved by using other methods. Chase knows these expenses all too well, and they want to help small businesses avoid extra fees.
As with all legacy banks, Chase enjoys a perceived security. The bank uses a 128-character encryption to protect your information. You can’t even access some of Chase’s mobile services on a jailbroken, rooted, or hacked device. These security measures work tirelessly to protect your business’ files, tax information, and transaction records.
Chase’s web and mobile apps also notify users of any unforeseen account changes. With this feature, wherever you are, Chase’s system can contact you if their security system is breached. Even with their online features, then, your money is safe, and you are in control.
Chase’s “Access Manager” feature allows business owners to give up financial responsibilities without losing the security of doing it themselves. The feature allows users to move money automatically at specifically chosen times. Chase markets this feature as allowing business owners to know where their money is and what it is doing at all times, without looking at their account.
Obviously, we have to mention Chase’s progress into the future. Chase is one of the first major US banks to adopt B2B payments as a vital part of business transactions. Though we don’t know much yet, the reputation of J.P. Morgan’s partner in this project, Bill.com, has already been established, as they serve approximately 2.5 million customers in the US. Combined with chase’s approximately 4 million small business clients, this innovation looks to take the US business finance world by storm.
Chase offers little to no options for small businesses to make payments or transfer funds outside of the US. Aside from its wire transfer system, the bank doesn’t even offer a non-domestic option for sending money.
Though this may change with the advent of their new system, there is no indication from J.P. Morgan’s press release that Chase looks to improve their international position through its partnership. In fact, Bill.com only supports US bank accounts and doesn’t support sending money abroad.
Chase, along with the other “big four” US institutions (Wells Fargo, Citibank, and Bank of America), is consistently ranked among the worst US companies. In a 2016 article, Balance noted that where Chase and other banks falter is in client relations and customer service, something that SMBs are known for being able to provide.
This is one of the major downfalls when dealing with a large, established bank: you become a number. Depending on how much your business makes and therefore contributes to the bank’s revenue, you may be treated better or worse. With a smaller payments company, you can expect the same personal touch that makes SMBs stand out among the big guys.
Tech and Efficiency
Like other major, established US banks, Chase is only now becoming involved in the B2B, online transfer game. To the surprise of many in our increasingly online and globalized world, Chase only introduced its multi-bank transfer network in early 2016, and that’s only for domestic payments! As a result, Chase’s payments technology is outdated. Coupled with the fact that not all of Chase’s payments services are online, clients sacrifice efficiency for the perceived security of an established bank.
The amenities that come with using Chase are not free. Compared to other US banks, Chase ranks among the highest for international and domestic transfer fees. Though the “Zelle” network has curbed it some, Chase still charges more than any other major US institution to wire money internationally or to a non-networked bank. This is hugely detrimental for small businesses that pay suppliers, bills, and employees abroad.
However, with Veem, you can avoid these cons and retain the pros. Veem operates in over 60 countries, charges no fees for international transfers, and is among the most promising financial start ups operating today. A team with over 100 years of combined payments and IT experience, Veem is at the forefront of an industry that US banks are only now entering. Pull your small business into the future with our fast, cheap, and secure payments method.
When choosing a bank for your SMB, it is important to keep your options open. As this list has shown, big banks aren’t all sunshine and rainbows. When deciding what to do with your money, businesses must consider the good, the bad, and the ugly parts of every company.