Tuesday, February 3, 2009

The Economic Upside

By Mark Brousseau

The current economic downturn has created a renewed focus on cash, and prudent cash management. And like any other economic situation, this trend has a downside and an upside when it comes to solutions sales in the payments space, says Wally Vogel, president of Toronto-based Purepay Receivables Automation (wvogel@pure-pay.com).

“We have seen mixed results in our customer base as a result of the new reality,” Vogel told me.

“One the downside, uncertainty is delaying projects and purchases,” Vogel said. “These deals are not dead by any means, but they are not moving ahead either.” Vogel calls this ‘purchase paralysis.’ “The delays we are seeing now are moving out sales that we have spent months developing. It is frustrating to have them stall as they near the finish line.”

Not only does this stymie payments solutions providers like Purepay, it also frustrates the organizations that can’t do anything but maintain the status quo, Vogel noted.

But there is an upside to the current economic situation. Vogel says Purepay is seeing some of its clients take advantage of the current environment to improve their technology infrastructure and gain a competitive advantage over their more conservative peers. “These clients are reducing costs, expanding their service offerings, and winning business,” he said.

“With the primary goal of prudent cash management, automating and enhancing the payment processing technology platform, and expanding rather than contracting business, is an effective way to achieve positive results,” Vogel said. “Organizations that invest in their payments infrastructure now are on an upward vector and will grow and thrive, despite the economy.”

As for the rest of 2009, Vogel expects to see even more of a stratification of the winners and losers in the payments space, and an increased focus by users on offerings that deliver immediate benefits. “Any investment of capital will be, and should be scrutinized to ensure that there is a solid business case, clear costs savings, and that it creates a competitive advantage,” Vogel said.

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