Interchange Optimization for B2B (Business to Business) Processing

MerchantProcessingNMCredit Card Processing/ Merchant Services

EMC_Blog_2Purchasing cards, corporate cards and business cards (B2B cards) are a procurement card issued by a large corporate or government entity to an employee to make purchases without the time consuming task of getting an approved acquisition form. These cards are authorized for certain types of business purchases. For example: An employee may purchase industrial parts for his manufacturing firm but not take his wife out to dinner or buy gas for his family car.

These types of cards have a high processing rate for the merchant of 2.95% because of the high risk of fraud from employees misusing their cards. However, the risk goes down, and the rate of processing goes down, if the merchant transmits not just the transaction amount but more data and information about the transaction that reduces the risk on the card and therefore also lowers the rate, data that indicates the card is indeed being used to procure authorized types of equipment or services. The data and information required to reduce the risk and the rate includes line item detail about the items purchased, sales tax, SIC code and more. Passing this extra data with each corporate, business and purchasing card transaction can lower the rates on these cards 1%. This is called “Interchange Optimization”.

This used to be a time consuming and frustrating process manually entering all the extra line item data using a gateway that many merchants weren’t willing to deal with, so they simply chose not to do it. Often if one “i” was not dotted or one “t” not crossed in the detailed process, the merchant ended up paying the highest rate for the transaction anyway. Many credit card processing salespeople never even brought the subject up, even though some merchants might choose to complete the process.

Now new technology from Electronic Money Company takes all the time intensive frustration away, and transmits the data and information automatically behind the scenes with the proper set up of the merchant account. The merchant simply swipes the card through a terminal, enters it online, or swipes it through a mobile app and gets the lowest rate, saving 1% or more on the transaction.

That could be a lot of money in savings! If you process $50,000 per month in business, corporate or purchasing cards, your savings would be $500 per month, or $6000 per year! If you process $100,000 per month with these types of cards, the savings would be $1000 per month or $12,000 per year! Wouldn’t you just want to save even $1000 per year!

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