The value of accepting credit cards for B2B transactions

Editorial Team

4 min read
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With average revolving credit card debt at nearly $7,000 per household, it’s safe to say that American consumers aren’t opposed to using plastic.1 They may not be crazy about interest rates, but the convenience, speed, and security are hard to beat. 

U.S. businesses also enjoy using their credit cards, since they receive many of the same benefits. A study found that businesses spent $523 billion on cards in 2018, and that number is expected to rise to $763 billion by 2022. With numbers like these, though, commercial card spend only accounts for less than 1 percent of total B2B payments.2 

When it comes to accepting payments, merchants may discourage their B2B clients from buying with credit cards to avoid paying transaction processing fees, since most purchases are for big-ticket or high-volume items. There is value in expanding the number of payment options for B2B customers — including accepting credit cards.

Why should you allow B2B customers to use credit cards

The most obvious reason to accept B2B card payments is because many of your clients prefer doing business that way. This is especially true when dealing with smaller businesses and startups.

Here’s another way of thinking about it – although credit cards comprise a tiny fraction of B2B sales, the total sales volume is huge. According to recent data, online U.S. B2B sales generated $1.082 trillion.3 By not accepting credit cards, you’re missing out on 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 accounting, CRM, and 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.
  • Credit cards are somewhat safer than debit cards, eCheck and ACH payments. Those types of payments are all directly linked to customer bank accounts, and gives criminals access to all the money in the account. With a credit card, if fraud does occur, personal finances aren’t put at risk and both sides of a credit card transaction enjoy certain protections, including refunds. 

Banks, by contrast, may not always come to your rescue.

Reduce B2B transaction costs with Levels 2 or 3 processing

Now that we’ve discussed the importance of accepting credit cards for your B2B operation, let’s get into optimizing interchange rates to save money on transaction processing.

Level 1 credit card processing is most commonly associated with business-to-consumer (B2C) payments and provides limited information back to the cardholder.

Level 2 credit card processing is typically used for B2B customers to make purchases, especially as the frequency and value of the transactions increase. Level 2 data includes more information to benefit corporate, government, and industrial buyers, making it easier to monitor and analyze their spending. This data includes customer codes, tax amounts, tax identifications, and other data. The additional information helps to optimize interchange costs.

Level 3 credit card processing offers even greater control by requiring users to provide even more data on each transaction. This is the B2B option most often used by merchants dealing with government agencies and large corporations. Because of all of the extra information required, this minimizes fraud risk, and you’ll be able to take advantage of lower processing rates.

Should you begin accepting B2B credit card payments?

By accepting B2B cards and offering Levels 2 and 3 processing, you can actually save money with optimized interchange costs. Plus, given the processing times and payment integration that credit cards offer, making the switch could be a wise investment.

Contact the Clover sales team to find out which Clover or partner solution is right for you.

1 “2019 American Household Credit Card Debt Study,” Nerdwallet, 2 December 2019
2 “Commercial Card Growth Led By V-Cards, Says Accenture,”, 7 December 2018
3 “2019 U.S. B2B Ecommerce Market Report,” Digital Commerce 360

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