Is your company established to process credit card payment transactions as a "retail" or “B2B” merchant account?
Are many of your customers businesses as compared to individual consumers? Are you a manufacturer or distributor?
If so, your account should be established as a B2B merchant account, not as a "retail" merchant account.
Nearly 100% of businesses are setup as "retail" - a setup that results in 30 to 50% higher costs to process commercial and purchasing cards. Credit cards that are increasingly presented for payment to B2B merchants.
Why do “retail” merchants pay higher fees than “B2B” merchants to process the exact same credit card and transaction?
The average storefront retail merchant processes credit cards by swiping the card at the point of sale. This payment processing environment is referred to as card present or swiped. Swiping a credit card is considered a low risk transaction - the card is there, you can request ID and compare signatures if you choose.
When a retail merchant keys (types) in a credit card number (like a B2B/B2G, manufacturer or distributor typically does) - it's processed as a keyed or card not present transaction - the cost charged to process the card goes up significantly to a mid-qualified transaction. The cost to process credit cards increase - along with the risk and/or costly programs associated with specific card types (rewards, detailed procurement reporting, etc.).
In addition to higher costs for card not present processing - retail merchants also pay even higher non-qualified interchange rates to process Commercial/Corporate Cards, regardless of swiped or keyed.
These are exactly the cards most often used for B2B payments/purchasing. Examples of these common cards are P-cards (Purchasing & Procurement), Commercial, Corporate or Business cards.
MasterCard, Visa, American Express, and Discover all provide drastically lower interchange rates (for substantial savings) for merchants properly set up as B2B and processing Commercial Cards. The low level 3 rates are provided as merchant incentive to provide the data in the proper B2B format.
How do you know if you are improperly set up as a “retail” merchant, when you should be set up as “B2B”?
1 - If you are keying transactions into a standard credit card terminal, you’re processing payments as a retail merchant.
2 - If you are keying transactions into a Virtual Terminal (at a computer) that does not prompt for Level 3 B2B data, you are processing payments as a retail merchant.
3 – If your costs for processing credit card transactions seem much higher than they should be… retail merchant?
What can you do?
Connect with an electronic payments professional that specializes in B2B/B2G to analyze your current processing statement and methods. Analysis will include a breakdown of the ratio and types of cards presented to your company for payment. If the analysis suggests a B2B solution with Level 3 processing, our electronic payment professionals will ensure a seamless transition for your company to B2B payment processing. There are typically no costs or change in business operations associated with the transition.
Being classified as a B2B merchant and implementing these best business practices can save your company 30 to 50% on current payment processing costs… a significant savings. That's what you do.
In fact, that's what we do. B2B merchants should contact XBS Global at 1-800-347-1090 or firstname.lastname@example.org to learn more about processing payments at the lowest rates available for B2B merchants like yourself. Lower B2B/B2G rates that are established for companies just like yours.