Business-to-business card payments are booming - over 7 in 10 companies now pay their suppliers and vendors by card. But B2B processing is not the same as ringing up a retail customer, and the fees behave differently. Understand the nuances and you can find the best deal for yourself or your clients.
How B2B processing works
Payment processors are the middlemen that handle authorization, clearing and settlement. General-purpose names like Stripe, Square and PayPal cover most retail, but B2B often calls for specialists such as Paystand, EBizCharge, Versapay, Bill.com and Ramp. The three most common B2B payment types are corporate credit cards, virtual cards and ACH bank transfers.
Compared with B2C, B2B transactions involve larger amounts, longer payment terms and more detailed invoicing - so they need stronger protection and reconciliation.
Where the fees come from
- Interchange - roughly 80% of the cost, set by Visa and Mastercard and paid to the issuing bank.
- Assessment - about 10%, charged by the networks (Visa 0.14%, Mastercard 0.1375%, Discover 0.13% per transaction).
- Processor markup - the remainder, priced as flat-rate, interchange-plus or tiered.
How to pay less
The biggest lever is data. Submitting Level 2 data (tax amounts, customer codes, postal codes) and Level 3 data (line items, product descriptions, quantities) signals a legitimate, low-risk transaction, so the networks reward you with lower interchange. On a $10,000 invoice, Level 3 processing can cut the rate by 0.50% or more - a $50+ saving per transaction. High-volume merchants can also negotiate their markup, choose interchange-plus for transparency, and steer large payments toward ACH, wire or e-checks.
Best B2B processors
Top picks include Paystand for zero-fee, blockchain-based payments, Braintree by PayPal, Stripe for developers, EBizCharge for ERP integrations, and Versapay for collaborative accounts receivable.