How to build trust with vendors for digital payment adoption

Trust is a valuable resource, especially when it comes to SaaS vendor relationships. According to a supply chain survey, 78% of businesses rank trust as the most critical factor in their vendor partnerships. But what happens when you decide to move to a digital payment approach and your vendor responds by saying they don’t trust this change and won’t partner with you anymore? This is why it’s crucial to understand beforehand how to handle such situations.

Research shows that nearly 70% of companies face resistance when implementing new payment technologies, with 1 in 5 experiencing threatened relationship terminations. The financial impact can be significant, too. The average amount you will have to pay for the onboarding of a new SaaS vendor ranges between $1,000 and $10,000. So, how exactly can you keep your relationships with your vendors, which also make these so needed changes for your business? Let’s find out.

What is vendor compliance, and why should you consider it?

Ever wondered how this specific SaaS vendor is working? Are they following the laws and regulations, do they keep your data they have access to safe, or are they even working legally? Without SaaS vendor compliance management, you cannot really know these things for sure. Statistics prove it: almost half of companies are less than 50% sure that the information vendors give them in questionnaires is accurate.

SaaS compliance is when you know for sure that suppliers follow your company’s rules and agreements. These rules cover things like quality, on-time delivery, following laws, keeping data safe, and doing business honestly. When you have a strong vendor compliance program, it helps make sure vendors meet your expectations, which, in turn, reduces risks and helps your business run smoothly.

Benefits of vendor compliance

When you implement vendor compliance, you automatically get a bunch of benefits with it. Here are some of the benefits:

• Ensure compliance. Makes sure vendors follow laws and rules, which helps avoid fines and damage to your reputation.
• Works better. Having clear processes and expectations makes working with vendors smoother, which increases productivity and reduces mistakes.
• Saves money. Fewer mistakes, delays, and rule-breaking mean less money spent fixing problems or paying penalties.
• Better relationships. When you clearly tell vendors what you expect, it builds trust and teamwork between your business and suppliers.
• Keeps data safe. Making sure vendors follow data protection rules helps protect sensitive information.

Examples of vendor compliance

Vendor compliance looks different depending on the industry. Check the examples below:

• Retail industry. Stores often ask vendors to follow specific rules for packaging, labels, and delivery. This helps keep the supply chain running smoothly.
• Healthcare sector. Hospitals and clinics require vendors to follow rules like HIPAA to keep patient information private and secure.
• Manufacturing. Factories may need suppliers to meet quality standards and environmental rules to know that products are of good quality and environmentally friendly.
• Information technology. Tech companies usually require vendors to follow cybersecurity rules and data protection laws to keep digital information safe.

Pick your team’s tools!

Click to select one or more tools.

Explore credits

What’s your company size?

Just click to select.

1-50

50-100

100-200

200+

Back Explore credits

What’s your business email?

We'll send you calculations right away

Back

The email is flying to your inbox!

Beyond discounts, you may qualify for up to $100K in AWS credits.

Explore credits

Common vendor concerns about digital payments and how to address them

When you decide to switch to a digital payment approach, some vendors might see it as a threat to your relationships. Why? Because they worry about new technology security risks, fear it will complicate their processes, or simply feel uncomfortable moving away from familiar payment methods they have been working with for years. Here we will cover some of the most common fears SaaS vendors have and how you can deal with them.

Is digital payment secure?

The biggest fear for many vendors is security. Yet, this type of payment is considered one of the most secure options, especially compared to physical credit and debit cards (only 9% fraud potential for digital payments versus 36% for physical cards).

What you can do:

• Implement payment platforms that comply with standards like PCI DSS (e.g., Stripe, Square, Paystand, and Aevi).
• Help your SaaS vendor learn. It means providing them with materials that help them understand what security protocols are used and how exactly their data is protected.

Will I receive payments promptly?

This one is also connected to possible issues of digital payments. There is a fear of delays in fund transfers compared to traditional methods. Unfortunately, this fear is real: almost 28% of businesses identify this issue as a number one priority to solve.

Here’s how you can deal with it:

• Select a platform that is known for timely payments (e.g., Tipalti, Bill.com).
• Provide choices like ACH transfers or virtual cards, which can offer faster and more secure transactions.

Are there hidden fees involved?

What vendors can worry about, especially when you implement saas application in your payment approach, is the hidden fees. Of course, it is easier to track these expenses with traditional tools, which is also a reason why many vendors don’t trust digital payments.

Here’s what you can do:

• Clearly outline any fees associated with digital payments.
• Work together to find a suitable payment provider for both you and your vendors.

Will I get adequate remittance information?

What SaaS vendors also find frustrating is the difficulty in reconciling payments without detailed remittance data.

What you can do:

• Use SaaS payment solutions that provide full access to remittance information alongside payments (Spendbase, HighRadius, WEX, or Moneta).
• Use SaaS solutions that automate the matching of payments to invoices.

Is the technology too complex?

If the system is new to vendors, they might not want to work with it to avoid learning how to use it. It is especially true if the SaaS vendor management system you chose has a lot of features.

Try the following things:

• Select intuitive payment solutions that require minimal training (e.g., PayPal, Stripe, and QuickBooks).
• Offer ongoing assistance and resources to help SaaS vendors learn about this new system.

Strategies to build trust and encourage adoption

So, how exactly can you both implement digital payments and still keep the trust of your vendors as before? Now that we have discussed vendors’ main fears, it is good to discuss best practices of how to work with them. Here’s what you can try and use in your digital payment adoption process.

Transparent communication

Communication is the key to solving most of the problems that can appear along the way. Share your payment processes, timelines, and systems with vendors to build more trusting relationships. Be upfront about any processing fees or payment schedules. A 2023 study showed that 43.33% of respondents identified the need for awareness (e.g., clear information about payment processes).

Education and training

The next thing you should do is to provide vendors with education materials, especially if it is a complex management system with numerous features. This strategy will show them that you care about their understanding of the digital platform, which will help to improve your relationships. Here are some examples of things you can provide:

• Webinars. Live session to answer questions regarding the new management system.
• Documentation. It includes guides and FAQs that vendors can reference as needed.
• Video tutorials. Visual walkthroughs of common tasks/questions.
• Interactive modules. Hands-on training sessions that allow vendors to practice using the platform.
• Support channels. Support teams or chatbots to assist SaaS vendors with any issues/questions.

Demonstrate compliance and security

Security can also be a stumbling block if not addressed as soon as possible. Vendors often worry about keeping their money information safe when using digital payments. They want to know that their banking details won’t be stolen and that the payment system follows all the necessary laws.

You can address these fears by showing them exactly how your digital payment system protects their information. For example, explain the use of security features, like SOC 2, in simple terms, like how the system collects and keeps their data so hackers can’t read it, or how they will need to verify their identity in two different ways before accessing accounts. These steps will help vendors feel more at peace with your company changes.

Offer incentives

SaaS vendors might not see right away why digital payments would help them. It can make them hesitant to change their ways.

To solve this, you can offer benefits that make the switch worthwhile. For example, you can offer financial rewards like discounts on transaction fees or small bonuses for trying digital payments early, which can motivate vendors. You can also provide extra services that paper payments don’t offer, such as faster payment processing or detailed reports showing payment patterns.

Provide support and resources

Vendors need reliable assistance. They often worry they will be left on their own to figure out new digital payment systems. This fear comes from feeling like they will get stuck with technical problems, make mistakes that affect their income, or waste time trying to learn complicated processes without help.

Do not let them feel that way. Make sure on this stage, they have plenty of support where they can turn to in case they get stuck with a problem and can’t solve it on their own. When SaaS vendors know they won’t be abandoned during the change, they will feel more confident about trying digital payments.

Save up to 30% on your stack

We can unlock discounts on 10,000+ tools you already use.

How to implement a vendor compliance program

The final part that we have to talk about is how you should implement a SaaS vendor compliance program, and not to scare vendors away. This process consists of several steps that include company assessment, policy development, and monitoring with constant feedback. Here’s a more detailed overview of each step.

Assessment

The first step is a company assessment. Here’s what you have to do here:

• SaaS vendor inventory. Make a complete list of every vendor and group them by what they do for you and how important they are to your business.
• Vendor risk management. Figure out which vendors might be risky by thinking about what company information they can access, how financially stable they are, and what rules they need to follow.
• Compliance history. Check if they’ve had problems following rules in the past.

For example, if you are a bank, you’d want to focus first on vendors who handle your customers’ personal and financial information. These vendors need extra attention because if they don’t protect data properly, it will lead to problems like data breaches or breaking privacy laws.

Policy development

Once you have categorized everything and found out which vendors are the best and the worst to work with, it will give you a better understanding of how to then create policies for your company. Here’s a little guide on how you should start it.

• Define regulatory compliance requirements. Specify the legal, regulatory, and internal standards vendors must meet.
• Create a vendor code of conduct. Create a document that clearly defines acceptable practices and behaviors expected from SaaS vendors.
• Contractual clauses. Include compliance obligations and audit rights in vendor contracts.

For example, if you own a healthcare company or you are a healthcare provider, you should keep in check that vendors adhere to HIPAA regulations and include this requirement in all vendor agreements.

Monitoring and auditing

Keep an eye on your SaaS vendors all the time to make sure they are following your rules. It is important as it shows which vendors take it seriously and which ones are not that involved. Here’s what you can do:

• Do regular updates. Ask them to send you regular reports showing how they are meeting your requirements.
• Set up simple ways to measure their performance. It can be tracking how often they deliver on time or how quickly they respond to problems.
• Plan regular checks of their work. Not just that, but also sometimes check without warning to see if they are really following the rules when they don’t expect you.

For example, an online store might watch how its shipping companies are performing by tracking delivery times and checking how they protect customer information.

Feedback mechanisms

Set up easy ways for vendors to talk with you about following your rules. This way, you show that their issues are important to them and you are willing to help them overcome them. Here’s what you can do:

• Vendor communication. Make sure SaaS vendors know who to contact when they have questions or notice problems.
• Internal reporting. Encourage your employees to report vendor compliance issues since it helps catch issues early before they become serious.
• Continuous improvement. Use the things you collected above to continue refining and updating policies.

For example, a factory might meet with its important suppliers every three months to talk about how well they are following safety and quality standards. During these meetings, they could review what’s working well and what needs to get better.