Apr 11
6
B2B Merchant Account Overview
Important Information For B2B Merchants On Accepting Credit Card Payments!
As a B2B or B2G business, you will find that business, purchasing and government (GSA) credit cards makeup a majority of your overall credit card sales. These credit card types are rapidly replacing the more inefficient and expensive paper purchase orders. Commercial credit card usage is estimated to top $190 Billion in 2011 according to a recent Federal Reserve Study.
Setting up a B2B merchant account to correctly accept commercial and government credit card payments is much different than setting up a normal Retail or MOTO merchant account. Without the correct rate structure and payment processing technology in place, accepting these card types as payment will become extremely costly to your business.
Avoid Tiered Pricing And Bill-Back Pricing
The reason behind the much higher processing rates and fees commonly associated with keyed-in and commercial credit card transactions, is mainly due to having your merchant account incorrectly setup on either a “Multi-Tiered” or “Bill-Back” pricing plan. Both of these pricing methods are wrong and very costly for any business within the B2B or B2G industry’s. The reason is that they will cause a majority of your credit card transactions to downgrade to much higher processing rates. This in turn will cost your business more money in processing fees each month.
Visa’s New B2B Rate
In the fall of 2007, Visa created a special B2B interchange category that offers a low processing rate of only 2.1% on all Visa commercial, purchasing and government credit card transactions for selected industry’s. This B2B rate is well over one-half of a percent lower than the normal Level 1 rates offered to other industry’s. The list of current eligible industry types can be found by Clicking Here. This special B2B rate alone will immediately lower your monthly processing fees by an average of 15-20%.
Level 2 Processing
Level 2 processing will be added in addition to Cost-Plus pricing to your merchant account. It requires special setup of your credit card terminal or payment gateway, so that it prompts for additional required Level 2 data when accepting commercial and government credit cards. This information makes the transaction more secure in the eyes of the card issuing companies, which allows your business to receive significantly lower interchange rates. Lower rates means lower processing fees.
The difference between Level 1 and Level 2 interchange rates can range from .35% – 1.2% depending on the card and transaction type.
Cost-Plus Pricing
Cost-Plus Pricing will give your company the ability to process ALL credit card and transaction types at their actual preset interchange rates. Interchange is the preset base rate (cost) by Visa, MasterCard and Discover for each card and transaction type. There are currently over 195+ interchange rates between Visa, MC and Discover.
Our processing rate is then applied as a flat fee on top across the board. We will charge you the same processing rate (basis points) regardless of the card or transaction type. This is the reason our program is named Cost-Plus Pricing
Let The B2B Payment Experts Help Your Business!
Tailored Transactions has a wealth of experience in processing payments for the B2B and B2G industry. We specialize in correctly structuring your merchant account to take full advantage of all the preferred pricing that is available from Visa, MC and Discover.
Visit us online at www.tailoredtransactions.com/b2b_b2g or call our office directly at 888-669-1686 to learn more on getting setting up with a B2B Merchant Account.
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