Credit card payments in the B2B industry are beginning to take off. In a report by the Federal Reserve Payments Study, credit card payments grew more than 10 percent between 2015 and 2016. The usage of credit cards in comparison to cash, ACH or check are beginning to edge upward, with their use amounting to 3.5 billion transactions valued around $190 billion in 2016.
A large part of this is due to the ease of use and benefits for credit card payments. Often times, the accounts payable specialist at a company has a credit card to use to pay the bills. Instead of having to get every ACH payment approved, it’s much easier for them to simply enter in their credit card information. And before you jump to, “well isn’t that what checks are for?”, checks don’t offer the benefits credit cards do. Companies can earn additional cash back or free flights for other business expenses just by paying off their invoices. Many are seeing credit card as a good business investment.
If you’re considering accepting B2B credit card payments at your company, here’s what you need to know first:
CREDIT CARD FEES
Unfortunately, accepting credit card payments doesn’t come free. There are fees your business will have to pay in order to accept each transaction, so you will need to prepared to pay these fees and be sure they are realistic for your business. There are 4 different fees that are tacked on to a credit card payment. The processor fee, or the party managing the money such as the bank, the processing fees, the gateway fee, or third-party software company and finally the interchange fee, or the credit card company. Doing your research on which companies are the most cost effective can keep these fees down extremely low.
CREDIT CARD SECURITY
The credit card industry has rules to ensure that your customer’s data cannot be stolen. This is one reason it’s important to use a third-party merchant to help manage credit card payments. There are rules on how you can store your customer’s credit card information and more. If these rules aren’t followed, more fees can incur. When looking for a B2B credit card payment solution, it’s important to find someone who is PCI compliant.
ONLINE BILL PAY
What’s the point of accepting credit card payments if you end up creating more work for yourself? If you’re sending our credit card forms and then manually entering them into your system one by one, you kind of defeat the purpose of the quick and easy use of credit cards. Consider using an online bill pay system for your customers. They help you stay PCI compliant and they allow customers to self serve their credit card payments. Often times, businesses using an online bill pay portal see a decreased past due percentage since customers can quickly go online and make a payment.