Direct negotiations with current providers optimize pricing results

According to purchasing expert Robert Menard, knowing the cost of a service being purchased is the single most important tool of the purchasing professional. ” Our dominant obligation and duty as purchasing professionals is to manage costs. We must be able to identify and and analyze the costs that make up the services we buy”.

When it comes to buying payment processing services, CAPE is your best option for determining the costs of processing your payments. Our proprietary models accurately estimate the costs of processing your electronic payments. There is no better position to be in, when a utility is negotiating payment processing pricing, than to know the costs of what your prospective or current service provider is selling.

Utilities and Tax Collectors rely almost exclusively on periodic (every four years is typical) competitive bidding to set payment prices. That process is proven to be effective at the time it is completed. However, four years is a long time. In today’s constantly changing payments landscape, costs change significantly in four years. Utilities and Tax Collectors rarely use an equally effective price minimization process: Direct negotiations with your current suppliers. Nothing prevents a utility from negotiating pricing directly with a current vendor. Direct negotiations, without the benefit of competitive pressure, are a fact of life. When a payment processor is presented with their cost of processing your payments, they have little choice but to adjust their prices if they are too high.

Knowing your vendor’s costs gives you an excellent negotiation advantage when you competitively bid your business and when negotiating directly with a current service provider. CAPE arms you with the costs of processing your specific electronic payments. CAPE knows how to use payment costs to negotiate on your behalf from a position of strength with both prospective and current payment processors.

In between four year RFP issuances, utilities and Tax Collectors should use direct negotiations with their current payment processors to insure they are receiving the best pricing available for themselves and for their customers. CAPE is an invaluable partner at the disposal of utilities and government agencies to provide the best available payment pricing for our clients and for their customers.