B2B Payment and Technology Solutions - How Credit Card Processing Can Help
Apart from being able to provide quality goods and services, a critical concern for B2B merchants is providing customers with secure and flexible payment options. Your business clients already have multiple concerns competing for their attention. Access to a seamless payment process in every transaction they conclude with you should not be one of them.
However, navigating the B2B payments landscape can often be a trying task, especially due to the unique considerations involved. Compared to retail or B2C businesses, firms operating in the B2B and B2G sectors require more sophisticated payment solutions. Security, flexibility, and ease of access are a priority for most clients in this space, meaning your business must go above and beyond to meet customer needs.
The state of B2B payments and technology solutions
Although the payments landscape is being increasingly dominated by retail-focused innovations, B2B payments continue to enjoy a large share of payment volumes. According to Deloitte, B2B payments were about $16.5 trillion in the US in 2016, and per research elsewhere, are set to reach $218 trillion globally by 2022.
However, B2B payments have historically evolved slower than the B2C payments landscape. Perhaps due to the immediate and significant rewards that retail-focused payments innovations provide, there has been a rapid iteration in solutions geared towards this sector.
This has left the B2B payments sector to develop more slowly in comparison. To put things in perspective, while instant payments processing platforms such as Apple Pay, Samsung Pay, and Venmo were gaining ground in retail, 64% of B2B businesses confessed to still making payments by check as at 2019.
Despite the slow-moving nature of things in this space though, there have been multiple innovations that are driving progress in the sector.
Get in touch with us today to learn more about how we help our clients achieve a competitive edge in their payments processes.
Common payment solutions available
Apart from more conventional payment options such as cash, check, wire transfer, and automated clearing house payments, there are increasingly modern payments solutions adapted in the B2B sector.
Online Payment Gateways and Virtual Terminals are evolving payment solutions for businesses, helping them speed up and streamline their payments process. B2B credit cards are also fast becoming an option of choice, supported by major payment brands such as Visa and MasterCard.
Certain businesses are even beginning to offer the option of cryptocurrency on the back of proposed adoption by major bankers like JP Morgan Chase and American Express. All of this indicates that there is healthy room for innovation in the B2B payments space; and for businesses looking to provide an outstanding process for their customers, there is room to get creative.
There are also certain newer innovations that are sweeping across the B2B payments space, some of which include:
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Development of card-based payment solutions that offer rich integration with client finance and ERP systems
- Increased adoption of one-time-use virtual card numbers (tokenization) linked to a business client’s credit facility. These can be used for single or centrally-billed payments without the risk of fraud that permanent credit card numbers pose
- Growing availability of virtual/card-not-present (CNP) payment solutions
How to improve your B2B credit card processing services
Due to the complexities of B2B payments, they will require levels 2 and 3 processing. Generally, B2C transactions only require level 1 processing due to the relatively low transaction values involved. This means transactions can be sanctioned with little information beyond card details and customer addresses being required.
However, as a result of their relatively higher transaction values, and the flexible payments structure that most business clients prioritize, B2B credit card payments will require higher levels of processing.
Levels 2 and 3 processing require B2B merchants to provide additional information on their transactions, especially as the frequency and money value of their transactions increase. For level 2 processing, additional information required includes tax identification, tax amounts, and customer codes. This helps payment processors more accurately verify transactions, and also allows corporate clients to enjoy more control over their payments. They can stipulate upper transaction limits, frequency of use, or how the card can be used.
Level 3 processing requires even more information, running as high as 9 to 14 additional fields that must be filled. Although the additional information required may be a bit troublesome for most companies, it serves to exponentially make purchasing management and reporting more effective in these transactions – an important outcome for B2B and B2G clients.
Perhaps most important, merchants who choose to provide the information required for levels 2 and 3 processing can enjoy lower fees on their transactions. Therefore, you can reduce your fees, and enjoy increased profits, even as you provide a seamless, risk-mitigated solution.
Merchant Direct can help
At Merchant Direct, we offer a full suite of solutions to meet the growing needs of B2B businesses in today’s virtual world:
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Interchange Optimization: Visa and MasterCard have special low Interchange rates for Business, Corporate and Purchasing credit cards. But your transactions can only qualify for these Level 2 and Level 3 rates if they include up to nine lines of additional payment details. Our secure payment gateway gives you the ability to automatically pass the data, ensuring that every one of your clients’ payments is charged the lowest possible rate.
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Custom Integrations: With our in-house team of highly skilled developers, we can help you integrate B2B payments into your existing ERP, CRM, Accounting, or business management software. Increase sales by taking advantage of Web Design, Shopping Cart and SEO solutions.
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E-Invoicing: Reduce the cost of invoicing by automatically sending physical and/or electronic invoices with secure payment links to all your clients. We offer secure portals for your clients, as well as scheduled and recurring billing and all payments are guaranteed to qualify for Level 3 Interchange.
- Security: The surge in online and card-not-present sales unfortunately also comes with an increase in fraudulent transactions and merchant breaches. Reduce fraud with our advanced security features – Fraud Filters, Tokenization and P2PE – which are all built-in to our full featured payment gateway. And your personal account manager will assist you with annual PCI Compliance and Quarterly Scans.