As payment processors we sit at a pretty unique spot in the financial services universe. Everyday we see money move in the blink of an eye from a tourist's foreign bank account to the ownership of your neighborhood coffeeshop. Money has never moved so fast, and there is a great demand for trusted individuals who can vouch for all the parties involved. As industry-regulated middle men, we are the risk assessor for the banks authorizing all these transactions. We tell them whether it's OK to sign off on a transaction from Tammy's Widget Shop, and assure them it isn't just a front for money laundering activities.
We've also had the opportunity to stand in this unique spot during an extraordinary time for the global financial system. Since 2008 the world of banking and transferring funds has quickly and drastically changed. On the one hand, technology has rapidly advanced, and we've all become far more savvy, compounding the effect on expectations of ease. In 2007, the idea of depositing a check from your phone was unreal. Today it is almost routine.
On the other hand, the traumatized rhetoric of recession and life "in this economy" has left behind a new, underlying fear of risk, even now that we talk about recovery. We've all reacted. Consumers for some time paid down their credit card debt, reversing the decades-long trend of extending more and more credit. Only in the last two months have people started accepting more credit card debt again. Others have resorted to more drastic manners of "improving" their balance sheet.
Banks too have become more cautious with their spending, and occasionally have also resorted to extra-contractual manners of holding on to precious cashflow. Indeed, there are times when this verges on outright dishonesty, or worse. But even, perhaps especially, in more petty situations banks increasingly demand that i's and t's are dotted and crossed if one does not wish to draw a greater amount of scrutiny.
Why? It all comes down to one issue: trust. Banks no longer trust their clients, and clients seem to no longer trust their banks. Despite historically low interest rates across the economy (compare treasury yields in 2005 to those today), its difficult to find a mortgage or small business loan because banks are just plain unwilling to take on any more risk.
Now more than ever is the time to build relationships and ensure that you know the people handling your accounts and your cashflow. That's what we do at Priority Payment Northwest every day: we're working to build trust with our clients and our financial partners, and working to build back up the finances of Portland businesses. By making sure that they have the representation they need when approaching the banks that deal with their funds, our trust in Portland businesses is helping them trust their banks, and we all see the benefits.
Matthew Koren is the President of Priority Payments Northwest, a credit card processing and payroll service provider located in Portland, OR. He runs his company, as well as partnering with a consulting practice: Causeit, Inc. You can contact him by filling out the Contact Us page, or by calling 866-402-1485, ext 750.