What You Need to Know About B2B Payment Processing

What You Need to Know About B2B Payment Processing

What You Need to Know About B2B Payment Processing

A B2B (business-to-business) transaction is any sale made to a business instead of an individual. When a company orders office supplies online, that’s a B2B transaction, but so is any purchase made with a business card. When a supervisor takes her team out to lunch with the company card, that’s a B2B transaction too.

Traditionally, B2B transactions were the territory of paper invoices and handwritten checks, but the convenience of credit cards is changing that. Your clients might be using business credit cards to separate business and personal expenses, earn rewards, or empower employees to pay for purchases made on the business’s behalf. Whatever the reason, allowing these businesses to pay with their preferred method, will help you keep your current clients and attract new ones.


Is accepting business cards more expensive?

You may have heard that rates are higher for B2B processing. Maybe you’ve already been paying those higher rates for some time. But accepting business cards doesn’t have to cut into your bottom line. If you choose a processor that can help you take advantage of lower rates, you can process B2B transactions without paying inflated fees.

In addition, increased sales, higher profits, and improved productivity can offset the fees associated with B2B card acceptance. By accepting credit card payments, you can easily reconcile your accounts, saving time that would otherwise be devoted to manual entry and paperwork. Perhaps more importantly, accepting credit cards for B2B transactions can increase your total sales, and funds are available more quickly—typically only 1-2 business days. According to findings by Forrester Research, online B2B transactions generated $780 billion dollars in 2015—a number that is expected to grow.


Do I qualify as a B2B business?

First, consider how many B2B transactions you expect. If your business sees very few, if any, business clients, it’s most likely not in your best interest to establish yourself as a B2B merchant. However, if your company sells almost exclusively to other businesses, or if you have a small number of high-ticket B2B transactions, read on. You just might be able to lower your processing costs.


What is a Merchant Category Code?

Before you can take advantage of the lower rates offered for B2B processing, you’ll need to be identified as a B2B merchant. Credit card associations classify every business using a Merchant Category Code (MCC). The products and services that your business provides will determine the MCC you are assigned.

Each credit card association has their own method for assigning MCCs. This means that if you accept Visa, MasterCard, Discover, and American Express, you could potentially have a different MCC code for each association. The process can be convoluted, but before you throw up your hands and say, “This is too much work!” make sure you reach out to your credit card processor for help. A good credit card processor will work with the card brands to make sure your business is assigned the proper Merchant Category Code. Once you’ve been assigned an appropriate MCC code qualifying you as a B2B merchant, you’re well on your way to discounted interchange rates.

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How do I qualify for lower rates?

To qualify for lower processing fees, you’ll need to submit extra data with each of your B2B transactions. Transactions are categorized into different data levels based on the information that is passed through with the sale. The more data you send, the higher the level of the transaction, which lowers your interchange rates. This extra information reduces the odds that the sale is fraudulent. When the credit card associations view the transaction as lower risk, they charge lower interchange. Here’s an overview of each data level:

Level I: B2C (business-to-consumer) transactions. This is the lowest data level, and therefore requires the smallest amount of data and offers the least savings. Qualifying a transaction at this level only requires 3 items of data.

Level II: Designed for B2B transactions, as it offers more security and allows restrictions on business cards. Qualifying a transaction at this level requires 5 additional items of data.

Level III: Designed for B2B transactions. Entering Level III data requires gathering extra information for each transaction but qualifies for the most savings. Qualifying a transaction at this level requires 19 additional items of data.

Manually entering Level III data isn’t a practical solution for most merchants. Collecting and entering all that extra information is time-consuming and inefficient. But, if you find the right credit card processing partner, it doesn’t have to be. The right processor should offer customized solutions for companies that accept B2B transactions. A processing method specifically tailored for B2B transactions will automatically capture the required data, allowing you to quickly and easily qualify transactions at Level II and Level III. That means paying the lowest interchange rates possible.


Final Thoughts

In 2008, Steve Jobs described successful business practices in these words, “Great things in business are never done by one person. They’re done by a team of people.” Establishing your business as a B2B merchant does mean jumping through a few hoops, but a credit card processor that is a true business partner will be ready to help you, to be on your team, every step of the way—from deciding if the switch is cost-effective for you, to implementing software to help you qualify for the lowest possible rate, each and every time.

BASYS Processing as a business partner 

Does your current processor understand the unique struggles of your industry? Do they provide great rates and personal customer service? Are they offering solutions to grow your business and being proactive about helping you reduce risk and increase your savings? 

Contact BASYS today to learn more about innovative payment solutions that will save you time and money. We make accepting debit cards and credit cards convenient, safe and affordable. 

BASYS Processing features: 

• A friendly, live voice will answer the phone when you call; no automated phone systems 
• In-house PCI Compliance team to walk you through the process step-by-step, improving security and reducing costs
• Accept payments in person, over the phone or online
• Next-day funding options 

About BASYS Processing 

BASYS Processing provides credit card and debit card processing services, plus solutions that include terminals, virtual terminals, e-commerce, mobile, and point-of-sale, customized to fit any need.  Banks, associations, and software partners depend on us to strengthen their reputations and relationships with their customers by providing remarkable service paired with ultimate flexibility and pricing. Merchants depend on us to make accepting credit cards and debit cards convenient, safe & affordable. BASYS was founded in 2002 on one philosophy: to take care of our merchants, partners, and employees so they never want to leave. We are dedicated to working one-on-one with our customers to design the perfect solution. BASYS is Personal Payment Processing. 

Learn more at basyspro.com, and connect with us online at: