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The Value of Accepting B2B Credit Card Payments

With the average credit card debt exceeding $15,000 per household, it’s safe to say that American consumers love shopping with plastic. They may not be crazy about the interest rates, but the convenience, speed and security are hard to beat.

American businesses also enjoy using their credit cards, since they receive many of the same benefits. Though when it comes to accepting payments, many businesses actively discourage their B2B clients from using credit cards. This is because card-based transactions carry additional processing fees that aren't seen with other common B2B payment methods, such as check, ACH or money orders. Although fraud is less likely in the B2B world, the potential damages are much greater since most transactions are for larger ticket or higher volume items.

This explains why credit card transactions account for only 20 percent of total sales within the B2B community.

If you don't allow your business clients to buy via credit card, you're definitely in the majority.

However, there are some compelling reasons why you should change this policy.  Believe it or not, there is tremendous value in expanding the number of payment options that your business offers — including credit cards.

Why You Should Allow Your B2B Customers To Pay With Credit Cards

The most obvious reason to accept B2B credit card payments is because many of your clients prefer doing business that way. This is especially true when dealing with small to mid-size businesses and startups — they tend to rely heavily on corporate plastic for their purchasing power.

Here's another way of thinking about it:

Although credit cards comprise a fraction of B2B sales, the total sales volume is staggering. According to Forrester Research, online B2B sales generated $780 Billion in 2015 — and by 2020, that number could increase to $1.13 trillion.

By refusing to accept credit card payments, your business is missing out on a lot of potential revenue, but there are other advantages as well:

  • Credit cards lend themselves to payment integration. It's possible to automatically sync all of your sales data with your favorite accounting CRM or ERP platforms. By contrast, checks and money orders have to be processed and reported by hand.
  • Credit card transactions clear much faster than most other payment solutions. This can be a huge advantage if cash flow is a concern or unexpected payment delays hold up important projects within your pipeline — but arguably, the biggest advantage is security. 

Whereas ACH payments, debit cards, checks and electronic payments are all directly linked to customer bank accounts, credit cards create a temporary buffer.  If and when fraud does occur, both sides of a credit card transaction enjoy certain protections that the other payment methods do not provide.

Banks, by contrast, won’t always come to your rescue.

However, not all credit card security is created equally:

  • Level I credit card processing is the most common — and it's what merchants use when accepting traditional B2C payments. Most of the security protocols are focused on external threats from thieves and hackers.
  • Level II credit card processing provides more information to the corporate government or industrial buyer, making it easier for companies to monitor and analyze their spending. This type of processing also comes with a benefit of being able to control spend, number of transactions, or how/when a card can be used. The security protocols are focused on internal threats from employees and suppliers.
  • Level III credit card processing offers even greater control by requiring users to provide more verification values and data. This is the option that most B2B companies should embrace, because not only does it provide the highest level of security, it also provides the maximum savings by passing through each transaction at the lowest interchange rate possible.

Should You Begin Accepting B2B Card Payments?

By accepting B2B credit card payments, you can actually save money with optimized interchange costs.

You will be far more likely to attract new customers. Plus, given the processing times and payment integration that credit cards offer, making the switch would be a wise investment.

To learn more, please visit the B2B Merchant Account page on our website.

If you would like to receive a no-obligation Free Rate Quote on your credit card processing, Click Here to complete our online request form. We will send you a detailed rate quote within 24 hours.

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