The Payment Problem in DSD

Collecting payments remains a significant challenge for many Direct Store Delivery (DSD) distributors. Paper checks get lost or delayed. Mailed invoices go unanswered. Even after a sale is complete, it can take weeks for payment to arrive.

Meanwhile, team members are busy making reminder calls, following up with accounts, and managing outstanding balances. The longer payments are delayed, the more difficult it becomes to manage cash flow and maintain smooth operations.

Instead of prioritizing growth, distributors often get caught in a cycle of waiting, chasing, and catching up—just to get paid for work they’ve already done.

The Rise of Credit Card Payments in DSD

Across the DSD industry, more distributors are adopting credit card payments. Retailers are no longer tied to paper checks. They now expect digital convenience in all of their business transactions.

And the data confirms this trend:

• In B2B, digital payments are projected to grow at a rate of about 9% annually through 2033, nearly doubling from $1.47 trillion today to $2.94 trillion. Credit and debit cards remain central to this growth. (Source: ResolvePay)
• Virtual cards are gaining momentum. In 2024, businesses accounted for 71% of the global virtual card market, with an annual growth rate of 24.7%. Among small and mid-sized companies, usage of recurring expenses and online purchases increased by 48%. (Source: Ramp)
• In the U.S., card-based B2B payments are expected to increase by 6.7% in 2024, nearly matching the growth of ACH payments (7.8%). (Source: eMarketer)
• Despite this, manual methods persist. Even today, about 40% of B2B payments in the U.S. are still made by paper check. (Source: Zip)
  
  

The demand is apparent: businesses want payments that are quick, digital, and reliable. Credit card systems—including store-and-charge, virtual cards, and invoice-linked online portals—have become natural, efficient solutions to meet that demand.

Online Payment Portals: Get Paid Faster

One of the easiest ways to speed up collections is through online payment portals. Instead of mailing invoices and waiting for checks, distributors can email customers a secure link to make online payments.

For your customers, it’s convenient—they can pay at their own pace with just a few clicks. For you, the distributor, it eliminates the back-and-forth of phone calls and payment reminders.

The result: fewer delays, fewer overdue accounts, and less time wasted chasing payments. Outstanding balances decrease, administrative tasks lighten, and cash flow improves.

Store-and-Charge at End of Month

For regular customers, monthly billing can save a significant amount of time. With consent, distributors can securely store a customer’s credit card on file and automatically run charges at the end of each month.

No more repeated payment requests or invoice reminders. Repeat orders and standing accounts are handled in a single step, making the process straightforward for both parties.

For distributors, it means dependable billing and steady cash flow. For retailers, it’s one less task to worry about. Everyone benefits from the efficiency.

PCI Compliance: Do It Right or Risk Fines

Processing credit cards comes with strict rules, and for good reason. Protecting customer payment data is essential. Yet even simple missteps, such as writing down card numbers or storing them in a spreadsheet, can violate PCI (Payment Card Industry) standards.

Non-compliance carries real consequences. Fines can start in the thousands of dollars and, for ongoing violations, can climb as high as $100,000 per month, depending on the business's size and the severity of the offense. Beyond fines, there’s reputational damage—and even the possibility of losing the ability to process cards altogether.

The good news is that compliance doesn’t have to be complicated. With secure, tokenized processing, card data is never exposed or stored manually. Implementing the proper safeguards to ensure that payments are handled safely and smoothly is essential.

But What About Credit Card Fees?

Credit card processing typically involves fees of around 2–3% per transaction. For distributors, that small percentage can feel like another cost added to already slim margins.

But the tradeoff is hard to ignore:

• ‍Faster payments mean cash in hand sooner.
• ‍Fewer collection calls free up time and reduce frustration.
• ‍Improved cash flow makes it easier to manage routes, inventory, and growth.
• ‍Reduced administrative work allows the team to focus more on sales and service.
  

For most distributors, the efficiency gained far outweighs the fees. Waiting for checks costs much more—in time, stress, and missed opportunities—than a modest card transaction fee ever will.

Ready to Simplify Payments?

Payment collection doesn’t have to be a constant struggle. By adopting credit card processing, DSD distributors can reduce delays, cut administrative headaches, and create a smoother experience for both their team and their customers.

The result: quicker payments, steadier cash flow, and less time chasing what’s already earned.

If you are interested in learning more about credit card processing in DSD, contact us today!

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