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B2B stands for business to business. Similarly, B2G stands for business to government. That is opposed to B2C which is business to consumer. In the world of credit card processing, B2B and B2G transactions are at higher risk. Why? Because there is more fraud when employees are tempted to use their business credit cards for personal items. The company figures it out and then issues a chargeback. Therefore, credit card processors charge a higher rate to merchants when they accept a business credit card compared to a consumer credit card. So how does a merchant who does a lot of business with commercial clients save money on fees?
I am Gingergaye, president of Electronic Money Company for 20 years and I will tell you how. You can save on average, .75% on your credit card processing fees! You can lower your overall rate from 3% to 2.25% by working with the right processor.
If more information about the sale can be gathered during the credit card transaction, then the risk is reduced. Such pertinent information includes the sales tax, shipping address, and SIC code. It used to be that only ONLINE B2B transactions allowed the merchant to gather this extra information, and that was always time-consuming and cumbersome. But technology has been able to help B2B merchants greatly.
B2B and collectively B2G transactions are considered Level 2 and Level 3 transactions. They can be recognized by the processing gateway as such whether the transaction is approved at a terminal or online. The gateway can add this information automatically and pass it through to the issuing bank for approval. They know what SIC code is associated with the merchant. The sales tax and address can be gathered via the transaction. With the extra information, the interchange bank fees are reduced. The savings are passed on to the merchant.
If you know that you take credit card payments from other businesses as well as from consumers, then working with the right processor and gateway who can automate the transfer of this extra information, can save you on average .75%! If you are transacting $50,000 per month in business cards, the savings is $375! $100,000 a month would generate $750 per month on your fees! Not a bad chunk of change to add to your bottom line monthly. Over a year it saves thousands.
Contact Us and write B2B comparison in the message box. We will be sure to get back to you quickly and do an analysis of your merchant statement to show you the savings!
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