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B2B Merchant Solutions for High Ticket Transactions

by | Jun 13, 2018

 

Visa and MasterCard long ago set aside specialty pricing for B2B Merchants who want to accept and process Purchasing cards (P cards) or Corporate credit cards for large ticket sales.  Retail pricing was cost prohibitive for these high ticket transactions that occur more frequently in the B2B marketplace and bank card brands recognized the need for more cost effective merchant solutions.

In addition to overall lower B2B payment processing rates for merchants willing to incorporate best payment practices and pass level 3 card data along with the transaction,  the card brands added an even lower Level 3 interchange rate to the B2B pricing structure specifically for high dollar ticket transactions.

What constitutes a high ticket transaction in B2B payment processing?

Visa and MasterCard differ slightly on this number, but the cost reduction for the transaction is substantial either way.  Let’s have a look.

MASTERCARD

> $7,254    RATE 1.25%  plus $40

VISA

>$8,725  RATE 1.45%     plus $35

VISA GSA*

>$5,984  RATE 1.2%       plus $39

*GSA stands for General Services Administration, a federal agency.  This rate is for government issued cards.  The US Government and most government agencies are strong proponents of purchasing card use.

Now let’s pick a transaction size that would meet all these card brand requirements and compare the costs at a standard retail rate, vs the high ticket rates noted here to highlight the savings.

$20,000 Transaction @ an average standard retail rate

(2.95% plus .10) = $590.10

MASTERCARD

 High Ticket –  $290

Savings = $300/51%

VISA

High Ticket – $325

Savings = $265/45%

VISA GSA*

High Ticket – $279

Savings = $311/53%

These rates are can fall lower still as the size of the B2B transaction grows.  Likewise as the dollar amounts increase, so do the overall savings.  Merchant solutions in the B2B marketplace have nuances not found in retail processing.

B2B PAYMENT PROCESSING TIPS FOR HIGH TICKET TRANSACTIONS

1.  Keep costs low.  Clearly there are substantial cost savings to be had when implementing best practices for B2B payment processing of purchasing and corporate cards.  B2B merchants should seek out payment processing partners with a niche in this field and apply a for merchant account that uses a payment gateway that can process Level 3 card data.   A consultant in B2B payments can assist in underwriting your merchant account for the maximum savings and efficiency.

2.  Fast funding.  Crucial to cash flow is how fast the merchant receives funding for these high ticket transactions (and others as well).  The underwriting process includes approval for expected average and high ticket transactions amounts.  While past merchant statements can assist the consultant – the number associated with the high ticket can also impact approval of the merchant account.  The payment processor does not just approve any amount the merchant may request.

It is possible then, that the merchant processes a transaction for a dollar amount that is higher than what they have been approved for. In this situation the processor may hold back the funds until they are assured it is a legitimate transaction.  The merchant should be proactive in these cases – faxing documentation to the processor such as the invoice to speed transaction authorization and release of funds.

Once again, a B2B payments specialist will manage this process for you.

3. Embrace acceptance of Purchasing and Corporate cards.  P card usage statistics show an annual volume in North America of some $267 billion and estimates 2018 at $377 billion.  Surveys indicate that card acceptance has become an integral part of supplier selection by corporate buyers and allowable transaction sizes are on the rise.

 

XBS Global advises B2B merchants to incorporate best practices, lower costs and pursue these very valuable supplier relationships with these companies and buyers.  Merchant solutions in this space can do more than streamline payments, they can increase revenues.  Why not tap into all this sales volume?  Have at it!

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