Historically, business-to-business (B2B) orders have been made over the phone or in person, and a paper invoice would be issued for payment. Payment would typically not be captured until a month or so later. Once payment was finally received via the mail, it would usually take a few more days to process and apply it. This whole process from start to finish could take anywhere from one to three months. Today, B2B customers expect real-time transactions and ease of placing orders like they do in the B2C world. Forrester Research said 93 percent of wholesales buyers prefer to buy online. As a business, you should want to make B2B payments a priority as well, so you can increase your customer satisfaction, and have the added benefits of increasing your cash flow.
Accepting digital payments for B2B transactions is not only a smart business decision, but it is also more affordable than you might think due to benefits of Level 3 credit card processing when you go with a payment processor that offers Interchange Plus Pricing. Interchange Plus Pricing plans pass the interchange costs directly onto you with a fixed markup. Thus, saving you money over a flat rate or tiered rate pricing plan. Typical B2B digital payment methods include ACH payments and online credit and debit card payments. In the B2B payment processing world, digital payments allow B2B companies to pay for products or services without using traditional methods, like cash or check.
Let’s dig into Level 3 processing a little more, as it requires you to submit additional data points with each B2B transaction to be eligible for the lower rates. You must also be designated as a B2B merchant with the credit card networks. Mastercard and Visa are two card networks that offer Level 3 rates, but not all networks do. In order to benefit from Level 3 processing, it requires more data points than Level 1 or Level 2, which results in added security and protection from fraud. It should also be noted that only corporate or purchasing cards (P-Cards) are accepted for Level 3 transactions that provide lower credit card transaction fees. Below is a chart that outlines the additional data points required for Level 3 credit card processing:
It is easy to pass this Level 3 data when you work with a processor that offers integrated payment processing. This is because the integrated payment processor will automatically pass along all the Level 3 data with the ERP and ecommerce integrations. Thus, the amount of time that can be saved when the payment processor you use is integrated with your ERP or eCommerce systems helps you not only streamline the payment process by avoiding manual entry, but also saves you money. Another thing to consider is if you have an eCommerce site that integrates with your back-end accounting or ERP solution is that you will want to look for an all-in-one integrated payment processor that is able to provide you with ONE redundant gateway, so you do not have to log into multiple gateways to reconcile. When more than one gateway is involved, you will have additional transaction costs that increase your cost of processing payments. By utilizing one payment gateway across multiple platforms you will have the ability to access the same credit card token ID, which will make it easier to issue refunds, voids, and process future payments.
Level 3 B2B processing rates are not available for flat rate or tiered rate credit card pricing plans, and you will only save money if you have an Interchange Plus Pricing plan.
B2B Payments don't have to be complicated.
It’s hard to imagine a time when digital payments didn’t exist, and with the rise of eCommerce storefronts for B2B businesses, you’ll want to look for a payment gateway that adheres to the Payment Card Industry Data Security Standard (PCI DSS). PCI Compliance is a set of standards dictated from the major credit card providers in the market working together to ensure the safety and security of credit and debit card data when processing B2B and other payments.
Bottom line, by accepting digital payments for your B2B business, you can improve as well as protect your business from fraud, increase payment security with safer transactions, and minimize chargebacks. B2B digital payments via ACH or credit/debit card make it convenient for your clients and your accounting team, while at the same time offering your business a source of credit.
According to a Deloitte 2015 study, B2B cards offer tremendous benefits for B2B Businesses, noting the key benefits are:
- Reduced processing time
- Reduced approvals needed
- Reduced admin cost
- Improved visibility/data reporting
- Improved supplier relations
- Improved cash flow
APS Payments is an all-in-one processor that offers flexible and integrated payments solutions for every business. We are a 100% PCI-DSS compliant solution and are trusted by thousands of merchants daily to process payments. We work diligently to provide our merchants the lowest credit card processing rates leveraging our industry expertise and help B2B businesses reduce risks. APS Payments is seamlessly integrated with Acumatica and Magento, as well as hundreds of other ERP, eCommerce, POS, and Mobile applications. Attend our upcoming webinar to learn how B2B Payments can save your business time and money:
Save Time and Money with Integrated B2B Payment Processing
DATE: Monday, April 29, 2019
TIME: 11 AM Pacific Time / 2 PM Eastern Time