People talk endlessly about how to improve the B2C payment experience. How can we make the process more seamless? How do we make sure our payment portal doesn’t drive the consumer away?
Even if you mostly sell your products to other businesses, you should be paying attention to conversations like these. We’ll let you in on a secret — checks, and invoices are not going to cut it anymore.
Heading into 2019, it’s going to be crucial that businesses in all industries make sure that they’re up-to-date on B2B credit card processing. Credit card payments are only getting more popular, and businesses that don’t accept cards are going to get left behind.
So how does this work, anyway? What do you need to know to get started?
Read on to learn the top five things you need to know about B2B credit card processing.
Why Is Credit Card Processing Important? Why Can’t I Just Use a Check?
Before we get to those top five facts, let’s take a look at just why B2B credit card processing is so important, anyway.
Just from general observation, it’s easy to see that Americans are obsessed with their personal credit cards. What’s harder to see is just how much heavy lifting commercial credit cards are doing.
Small business credit cards alone accounted for $493 billion in purchases in 2017. By 2022, you can expect that number to get as high as $686 billion. That doesn’t even count the massive amounts of money spent on corporate credit card holders at larger companies.
Plus, the rise of freelancing and the gig economy mean that an increasing number of everyday people now technically qualify as small businesses.
It can be tempting to just stick with the tried-and-true of invoice processing or depositing checks. And you could … technically. But you would be missing out on a lot of potential business.
Here’s a quick guide to how B2B credit card processing can work for you.
1. It’s Not as Expensive as You Think
The most common objection to B2B credit card sales is almost always the cost. While credit card companies rake in the cash from each transaction, the merchants accepting the commercial cards get stuck with the short end of the stick.
It’s true that depending on the card, merchants will usually pay somewhere from 1.5 to 3 percent on each transaction. However, if you know how, you can usually keep your fees closer to 1.5 percent.
How? First, depending on your processor and your industry, you might be able to negotiate a lower rate. Certain businesses also cost less than others.
Second, if you collect and submit more payment data, you can keep your fees low.
For all of the additional revenue that accepting credit cards can bring in, a 1.5 percent fee is a pretty low price to pay.
2. Collect More Payment Data
This is a benefit for you in two major ways.
First, like we said above, collecting and submitting additional data can keep your costs down. Don’t worry. This isn’t a breach of privacy — this is traditional data that’s collected from every purchase.
There are three levels of data that can be submitted to the processor. Level 1 is mostly for regular consumer cards. This is the information that’s always submitted no matter what: the merchant name, transaction total, and the date of the transaction.
Levels 2 and 3 are the extra information associated with commercial cards. This includes facts like the amount of tax (Level 2) and the item description (Level 3).
The more data you submit to the processor, the more you save. Plus, you’ll have an easily accessible, detailed record of each sale, without doing a ton of extra work.
3. Credit Cards Are More Convenient for the Consumer
So why are we talking about how you can make credit cards more convenient for you if you already have a system that worked well? One big reason — credit cards are more convenient for the consumer.
Yes, in this case, the consumer is another business. But let’s take a moment to think about this. Look at it from their point of view.
If they need to submit a return or exchange, that process is far easier with a credit card number. Buyer protections are stronger. And if the purchase needs to be disputed for any reason, they have a clear process to go through.
If using a credit card is so easy for consumers, why would they go through the hassle of using any other payment method? And if you don’t accept credit cards, then why should they go out of their way to work with you?
4. Increase Your Sales
Here’s where we get to one of the major benefits of accepting commercial credit cards. By updating your payment processing system to one that’s faster, more convenient, and easier for everyone involved, you can actually increase your sales.
All businesses want to make sure that they remove any potential roadblock for customers as they work towards a sale. You want to make the process as easy as possible for them.
If the way you process payments has been too much effort, you could have lost out on business without even realizing it. On the other hand, accepting credit cards improves your customer experience, streamlines the process, and makes it way easier for them to spend money with you.
5. Stay Competitive
As more businesses accept credit cards for B2B transactions, you’ll need to make sure that you’re keeping up with the other major players in your industry.
If customers don’t get the experience they’re looking for with you, they’ll go somewhere else to find it. You can stay competitive and lower the chances of losing to a competitor by getting rid of one huge payment barrier — being able to pay with a credit card.
B2B Credit Card Processing Is Easy to Set Up
B2B credit card processing doesn’t have to be intimidating. In fact, when you work with the right processors, it can even be easy to set up.
High Risk Solutions makes life easy for you by taking the stress and hassle out of the virtual merchant experience. From low-risk small businesses to riskier ventures, we can help.
Want to learn how? Get started with your account today.