A resource for finance leaders navigating pricing changes from spend management platforms.
Author: Chris Giese, Managing Director of Corporate and Community Payments
Spend management platforms have delivered real value: streamlined AP, better card controls and cleaner reporting. But recent pricing changes across several of these platforms are prompting a decision that deserves more than a rushed response to a vendor's deadline. That decision is whether to move your organization's operating cash onto the platform to avoid new fees or capture an advertised yield.
Before you make a move, one idea is worth holding onto: the fee you are trying to avoid may cost less than the value you are giving up.
The 12 questions below will help you find out. They are worth asking out loud, and in writing, before any deadline passes.
Where Your Money Will Actually Sit
1. Where exactly will your money be held?
Some spend management platforms are not banks. When you fund a platform account, your deposits may pass through a program manager, one or more partner banks and a sweep network before they rest anywhere. Ask for the name of the institution actually holding your funds, confirm that information in writing and verify that the institution is FDIC-insured.
2. Who are the partner banks, and what are their roles?
In many platform arrangements, your funds may be distributed across a network of partner banks you did not choose and may not recognize. Ask for a complete list of those institutions, understand what role each plays and confirm whether the network can change without notice.
This information may become especially important if fraud occurs or funds must be traced or recovered. Understanding which institution received or holds the funds can help clarify who must be contacted and how the recovery process will be handled.
3. What are the pass-through conditions on your deposits?
Eligibility for pass-through FDIC deposit insurance depends on specific regulatory and recordkeeping requirements being satisfied. Ask the platform to explain how the arrangement is structured, what requirements apply and what happens if those requirements are not met.
4. What happens if the program manager fails?
The program manager is the entity that administers the platform's banking arrangement. It is distinct from the partner banks holding your funds. If the program manager experiences financial difficulty, is acquired or exits the business, the continuity of your account access, your transaction history and your ability to retrieve funds may all be affected. Ask specifically: what is the contingency plan, and what are your contractual rights in that scenario?
What the Yield Really Is
5. What exactly is the yield product, and which version have you been shown?
Some platforms offer more than one investment product, and they are not equivalent. One version may invest in a government money market fund. Another may hold a managed portfolio of Treasuries, certificates of deposit and corporate bonds. These carry different risk profiles, different liquidity characteristics and different disclosures. Before making any comparison to a bank deposit or sweep account, ask the platform to identify the specific product you have been shown and provide its full disclosure document.
6. How is the yield being quoted, and what would you actually realize?
An advertised yield figure is not always directly comparable to the rate on a bank deposit. Depending on the product, the quoted yield may reflect assumptions about the underlying investments, holding period and market conditions. If you need to access operating cash or sell investments, the return you ultimately realize may differ. Ask how the yield is calculated, what the liquidity terms actually are and what you would receive if you needed to exit.
7. What does the yield look like after all platform costs?
A gross yield figure does not tell the full story. Subscription fees, bill pay fees, transaction fees and other platform charges all affect your net return. Before comparing a platform yield to what your operating cash earns at a bank, calculate the yield net of every cost associated with being on the platform. The comparison may look different than the headline number suggests.
What Your Board Allows
8. Does your Investment Policy Statement permit this?
If your organization has a board-approved Investment Policy Statement, it may govern where operating cash and short-term reserves can be placed. An IPS may restrict funds to FDIC-insured deposits or specific instrument types. A managed portfolio holding corporate bonds may fall outside those restrictions entirely. Before moving cash to any platform investment product, confirm with your board or finance committee that the specific instrument is explicitly permitted. This is a governance question before it is a financial one.
What the Move Is Actually Worth
9. What is your operating balance actually worth where it is today?
Operating cash held at a bank typically generates value through an Earnings Credit Rate (ECR), a credit applied against your banking service fees or through interest, depending on your account structure. Before concluding that a fee waiver saves you money, calculate what your current balance is already earning or offsetting.
10. Have you calculated the full value of the waiver across every payment type?
Fee waivers on spend platforms often apply to more than one payment type. Before deciding whether a waiver justifies moving your operating cash, calculate your actual annual volume across all payment categories: standard ACH, same-day ACH, checks, domestic wires and international transfers. The total may be higher or lower than an initial estimate based on ACH and checks alone. Run your real numbers, not an illustration. Then weigh that figure honestly against the value of the deposits you would be moving and the terms under which the waiver could change.
How Would You Leave
11. How will you know if pricing changes again, and what notice are you entitled to?
Platform pricing, rates and waiver conditions can change over time. Ask what contractual notice you are entitled to before fees increase, rates change or waiver conditions are modified. Understand whether that notice period gives you enough time to move your funds and your workflows without disruption.
12. What are your data export rights if you need to leave?
Deep platform integration – connected AP workflows, card programs, ERP sync – creates switching costs that grow over time. Ask specifically what data you are entitled to export, in what format and whether there are fees or restrictions on doing so. Evaluate your exit options now, while you still have leverage.
Before You Respond to Any Deadline
None of these questions require you to stay where you are or to move. They simply point out that the decision should be made using your data, on your timeline and within your governance framework, not from an illustration attached to a deadline-driven email.
Before making a decision, talk with an FNBO relationship manager or payment advisor about evaluating your options using your actual operating balances, payment volumes and banking structure. We can help you understand what your balances are earning or offsetting today, compare that value with the net financial impact of a change and identify alternatives you may not have considered.
The goal isn't to steer you toward a particular answer. It's to make sure you're comparing the full financial picture before you move operating cash.
Contact your relationship manager or payment advisor today, or contact us to get connected.
About the Author
Chris Giese is pleased to lead an exceptional and dedicated team. He enjoys meeting with clients to better understand how the bank can serve their financial needs.
This information is intended for educational purposes and does not constitute financial, legal, or investment advice. Organizations should consult with their legal counsel and financial advisors regarding their specific circumstances, investment policy requirements, and regulatory obligations.
