Are You a Prepared Merchant?
B2B transactions are on the rise.
According to Celent - a financial industry research firm - in 2007 there were 11 billion in B2B transactions in the US alone amounting to $36 trillion in dollars spent. Of these transactions, 70% were traditional paper check payments. More importantly - at the time Celent estimated that approximately 4 billion of these transactions will move to electronic payment in 5 years. Processing giant First Data goes so far as to estimate that in the next 7 years.... only 10% of B2B transactions will be made with paper checks.
Business to Business electronic payment processing. Wow.
Government, hospital and school purchasing departments using purchasing cards to buy everything from toilet paper and office supplies to intricate medical devices or components used to manufacture high tech military weaponry.
Large corporations issuing corporate credit cards so controllers can monitor travel and entertainment expenses or various department expenditures and budgets (unless you work at AIG - no monitoring there).
Even small mom and pops - solicited by their local banks to accept company cards with lines of credit - with rewards programs attached for cash back or travel.
Makes sense. Are you a prepared merchant?
In traditional tiered pricing - (a good 90% of the small and mid size businesses we help are on this merchant pricing program) - purchasing, corporate and company card transactions typically downgrade to the non-qualified price...the highest price the merchant could possibly pay.
The writing is on the wall - merchants who are not prepared to at a minimum process at the B2B level II processing rates - will pay a steep price for falling asleep at the wheel.