Kate Fitzgerald's recent article in Cards & Payments put some umph in recommendations that wholesale or business to business merchants give some serious thought to accepting credit and purchase cards for payments.
It seems some major card issuers are seeing purchasing and T and E (travel and entertainment) card activity on the move...upwards - as more businesses make the shift from spending with paper check to plastic. The benefits are bountiful in tough economic times - primarily - the ability to track and control costs across the board. Benefits go deeper - but substantial cost savings are a great place to start.
But how does this affect the wholesale merchant or business providing services and products to these businesses that now purchase with cards?
Fitzgerald notes that key categories for purchasing card transactions include computers, telecom and printing equipment, media and advertising services, as well as transportation and delivery serivces.
Merhants who sell these products and services to other businesses should take note, processing commercial cards with the wrong equipment or without a specialized B2B merchant account can be costly. B2B credit card processing or wholesale processing is more than just taking cards. Level II processing requires the appropriate input of information with the transaction and Level III processing means the appropriate equipment, programming and merchant account...if you want to process your customers cards at the lowest possible interchange or discount rate.
Besides keeping your customers who now buy products with corporate credit or purchasing cards happy, your business can benefit from reduced paper transactions in the same way your customers have. Consider Fitzgeralds references to the cost of an average paper transaction - $90...up to $150 in large organizations! How about eliminating paper invoices and bulky statements?
It's true, accepting the card vs a check has a cost to it as well - interchange fees and the cost of the service, but quick, guaranteed payment via the card is huge, not to mention those overhead cost savings Fitzgerald touts.
Purchasing cards are being touted as the norm in as little as "five years" ...will you be a B2B processing merchant by then? or more importantly, will you be a profitable, B2B processing merchant?