B2B Credit Card Processing / How Honoring B2B Payments with Clients Boosts B2B Sales 

As a small business owner, one way to increase sales potential is to offer multiple purchasing options for buyers. Standard payment methods include cash, checks, ACH, e-wallets, debit cards, and credit cards. But one sales category worth looking at more closely is B2B sales. More transactions are done between businesses than between businesses to customers – especially with recurring payments. You can benefit significantly by finding better ways to serve your business clients.  

Businesses are increasing their use of B2B credit cards during business sales. Though it is wise to honor B2B credit card transactions to keep a client happy, there are benefits for you too. These cards are a powerful ally to improve margins for faster growth. 

This article reviews the world of B2B credit card processing and why it’s crucial.  

A Complete Guide To B2B Credit Card Payment Processing 

Credit cards are increasingly being used by companies to charge expenses. If you run a B2B company, it might be worth exploring the ins and outs of processing credit card payments for your transactions with other businesses. Here are the reasons why, but first, what do we mean by B2B credit cards?   

What is a B2B Credit Card, Exactly? 

B2B credit cards, also known as commercial credit cards or corporate cards, are much like a customer credit card but have added benefits worth discussing with your clients and even for your use. 

  • The credit card companies offer rebates for usage – as much as 80% of the interchange value. 
  • They offer more precise reads on purchasing histories, increased payment information, and detailed reporting of all activities. 
  • They have spending limits set by the business in charge of the card. 

When you allow for B2B credit card payments as a business owner:  

  • You stay competitive as a supplier while strengthening your relationship with those businesses. 
  • You maintain better payment records for your accounting purposes. 
  • Cardholders, on average, spend 12 to 18% more than when paying by check or cash. Anything you do to encourage credit card payments will increase your growth potential. 

Benefits Over Paper Checks 

Historically, the most popular way businesses pay for products and services is with checks, but the work of cutting, sending, and processing checks makes this B2B payments process more labor-intensive and time-consuming than paying with a credit card. In the business world, time is money, both for your client and you. In addition, you must wait longer for payment due to the mail and longer billing cycles for businesses, such as 30 days.  

Checks can also be lost, stolen, frauded, and inputted incorrectly, further bumping out the timeline. Then you will also have to contend with clearance of checks with your bank, which can take longer than a week for more comprehensive reviews. 

The total aggregate cost for check processing ranges between $4 to $20 per check transaction, and these costs include all labor time, shipping, and bank charges. 

With credit cards, business orders can be placed by you or your client instantly online from anywhere using your payment gateway. In addition, you can still take payments over the phone and in person. The entire process is much faster no matter how it is done and at a lower cost ranging from 1.8 to 2.9% plus a 10-cent transaction fee.  

 Invoice Benefits of B2B Payments 

You also enjoy advanced accounting tools such as digital invoice creation, reoccurring payments capability, custom software integration, and accounting integration. These benefits keep you organized and are so advanced and easy that they could do the job of manually generating an invoice redundant. You won’t have to contend with processing a backlog of invoices so that you, your sales teams, and your accounting staff can pursue other critical business initiatives. Additionally, you can create recurring reminders to ensure clients pay on time.  

More Savings through Lower Interchange Fees 

What are interchange fees, and how do they affect how I accept B2B payments? 

As with customer credit card purchases, you are charged interchange fees by the credit card issuer and your processor, but B2B interchange rates are lower than B2C processing costs. You can keep interchange costs even loser by shopping other processors for lower merchant processing fees. You will need specialized software and must meet several requirements to gain the correct status for this added discount for B2B transactions. 

If you run many transactions, these savings on interchange fees result in significant discounts that benefit any business. For example, if you run a nonprofit, savings can significantly increase the good you can do. 

How Merchant Category Codes Bring Added Cost Savings 

Merchant Category Code (MCC code) is a unique code that credit card companies use to classify your business based on the services and products you offer. Each card has its methods of classification and coding. 

The correct MCC code must be attached to your account through your merchant account provider to benefit from this interchange savings. Keep in mind each credit card provider has its codes.  

Levels of Credit Card Purchases 

What Kinds of Savings Can I Expect from Data Levels? 

Business credit card transactions fall into one of three levels: Level 1, Level 2, and Level 3. Customer credit cards remain at Level 1. Though the names and requirements of each level depend are different for each credit card company, the more information (data) you have on an invoice, the higher the level you climb and the lower the price you pay as a B2B merchant. Inversely, any gap in data can affect your level and, therefore, your discount.  

Some common examples of information you need to provide at each level are:

Level 1:
  • Merchant DBA
  • Transaction amount
  • Billing zip code
Level 2:
  • Sales tax
  • Customer code
  • Merchant postal code
  • Merchant tax ID
  • Invoice #
  • Order #
Level 3:
  • Item commodity code
  • Debit or credit indication
  • Discounts per line item
  • Extended price
  • Line item totals
  • Freight/Shipping amount
  • Product SKU
  • Duty amount

Interchange fees may fall from a Level 1 cost of 2.81 percent to 1.8 percent at Level 3. Note that not all merchant accounts honor levels 2 and 3, so be sure to check with your merchant account and, if needed, pay upgrade fees.

B2B Gift and Loyalty Card Processing 

These options are excellent for maintaining reoccurring sales and are available in affordable options, letting you provide the same high level of service as national companies. They also help you stand out from your direct competition, maintain customer recognition and frequency, and boost your company identity with your customers.  

B2B Mobile Processing 

Mobile processing options have extended far beyond a single countertop credit card terminal. You can now take orders on computers, mobile devices, and proprietary handheld devices for payment processing anywhere you and your sales teams are. Accept payments and track individual sales performance across multiple devices on the same merchant account. This system works with both cellular and wifi-enabled devices such as iPhones, Android phones, and tablets. 

B2B Online Payments 

Take payments over the phone or online without the need to have credit cards physically present. Customers can pay at a day and time that’s most convenient for them. You can enjoy e-commerce solutions such as shopping cart capability, mail order, and telephone order capabilities, all at affordable prices to benefit any size business. 

Security of B2B Credit Card Processing 

There can be some apprehension about running credit cards due to perceived issues with data security. Still, full protections in place aren’t only beneficial and even required for added peace of mind.  

  • PCI Compliance is a global security standard specifically created to prevent credit card fraud by aiding businesses with increased controls around data and further reducing the risk of becoming compromised. All credit card companies require this. 
  • payment gateway connects your online system to your credit card processor. It provides advanced protection for credit card data, bringing a lower rate for card-not-present transactions online. You can also easily track all payments and sales results through one secure source, integrating with other critical management and accounting tools. Your merchant service provider can help connect you to this system. 
  • EMV (Europay, Mastercard, and VISA) cards help protect you from chargebacks and financial liability. Understanding the world of today’s “EMV” credit cards is not all that easy, so we made a guide directly on the subject. 

BNG Payments: Offering B2B Merchant Services and Payment Processing 

BNG Payments have positioned itself as both a merchant payment processor and merchant services provider, making us a one-stop source for secure processing and quality back-end merchant services and support for business of any size. Our expertise in B2B and B2C payments results in faster, more reliable processing with the full ability to read each transaction on any device. And with full digital e-commerce capability, phone order capability, and advanced fraud protection through collaborations with top-tier financial institutions, you can accept payments in more ways as your business evolves. 

We connect you to the full range of B2B credit card processing options and assist with setup. You get all of these services at a competitively low rate and without the need for a contract, saving you further. Along the way, you get the same high-level 24-7 manager support you would expect for a large enterprise client. 

Large corporations and publicly traded companies have used our secure payment processing services to help them conduct large payments at reduced costs. It’s time for you to experience these benefits yourself as a small business. Contact us today.