Over 7 in 10 businesses use credit cards to pay other vendors.
Whether it’s a restaurant supplier, software, or manufacturer making physical products.
Business-to-Business (B2B) credit card transactions are getting more popular.
If you understand the nuances of credit card processing fees between businesses you’ll have a greater chance at finding the best deal for yourself, or your clients.
This article has everything you need to know about the world of B2B credit card processing, how it works, the associated costs, strategies to minimize fees and emerging trends that could impact your business.
How B2B Credit Card Processing Works
Role of Payment Processors in B2B Transactions
Payment processors are ‘middlemen’.
They facilitate funds between businesses, handling the authorization, clearing, and settlement of transactions, ensuring that payments are processed securely and efficiently.
Some of the most popular payment processors in 2025 include Stripe, Square Paypal, Shopify Payments, Clover, Helcium, Authorize.net.
These are general use processors.
B2B transactions need special processors like: Paystand, EBizCharge, Versapay, Bill.com and Ramp.
The 3 most common types of B2B payments are as follows:
- Corporate Credit Cards: Issued to employees for business expenses.
- Virtual Cards: Digital cards used for one-time or recurring payments.
- ACH Payments: Direct bank-to-bank transfers, often used for recurring payments.
What’s the difference from business-to-customer credit card processing (B2C)?
There’s two main differences: Risk and transactions.
B2B transactions involve higher amounts and longer payment terms. They need higher levels of protection typical processors might not offer.
B2B transactions also require more detailed invoicing and reconciliation processes.
Not having proper B2B processing as a successful business is like carrying 10 million dollars in your purse. That kind of money is better fit transported around inside an armored car.
B2B-specific credit card processors offer the ‘armored car’ service for businesses.
Breakdown of B2B Credit Card Processing Fees
Interchange Fees – 80% of total processing cost
Interchange fees are charges set by card networks like Visa and Mastercard, paid to the issuing bank. These fees vary based on factors such as card type, transaction size, and industry. For B2B transactions interchange fees can be higher due to increased risk and complexity.
You can see a table of typical fees charged by both B2C and B2B transactions by different processors below:
Notice how B2B fees are influenced by data levels. I’ll cover more of that in depth as we go along…
Assessment Fees – 10% of total processing cost
Assessment fees are charged by the card networks themselves, typically as a percentage of the transaction. For example:
Visa: 0.14% per transaction, 0.80-1% international fee
Mastercard: 0.1375% per transaction, 0.6% cross border fee
Discover: 0.13% per transaction, 0.8% international service fee.
Payment Processor Markup Fees – 7% of total processing cost
Payment processors add their own fees for merchants to access their services.
Flat-Rate Pricing: A single rate for all transactions.
Interchange-Plus Pricing: The actual interchange fee plus a fixed markup.
Tiered Pricing: Different rates based on transaction qualifications.
You can get an in-depth walkthrough on each inside my other article titled How much do Credit Card Companies Charge Merchants.
Understanding the benefits and drawbacks of these 3 pricing models is crucial because it impacts your overall processing fees.
How Processors Make Money from B2B Transactions
Processors earn revenue through the markup fees they charge on top of interchange and assessment fees. They may also offer value-added services, such as fraud protection and analytics for additional fees.
To break this down, imagine a lemonade stand (a business).
Your neighbor wants to buy lemonade, but instead of cash, he wants to use a credit card. You ask your older brother (the payment processor) to help you take the card.
Here’s What Happens:
- Your neighbor gives you his credit card.
- You swipe it using your brother’s cool phone gadget.
- Your brother talks to the bank, gets the money, puts it inside a locked safe to keep it safe while he walks from the bank to your house, and then puts it in your piggy bank.
BUT Your brother doesn’t do it for free. He says:
“For every $1 you sell, I get a little bit, 3 pennies. That’s my payment for helping you.”
So if you sell $100 of lemonade, you keep $97 and your brother takes $3 for his help.
That’s Exactly What a Payment Processor Does
They help businesses accept card payments, talk to the bank, send the money, and take a small cut (called a “markup” or transaction fee) to make a profit. Simple, right?
Ways to Reduce B2B Credit Card Processing Fees
Nobody likes losing money or getting a bad brother who takes more than he needs. That’s why to save on B2B processing fees you need to know about Data Levels.
Level 2 and Level 3 Processing
Providing transaction data can qualify a business for lower interchange rates. But what exactly is Level 2 and 3 Data?
Level 2 Data: Tax amounts, customer codes, and merchant postal codes.
Level 3 Data: line-item details, product descriptions and quantities.
Banks will give lower rates for providing this because it builds trust! Interchange fees are risk and data based.
The more data = lower the risk for the issuing bank. Level 2 or Level 3 data essentially says:
“Hey, this is a real, traceable, legit business transaction. Here’s all the proof.”
This gives the bank more confidence that:
- The transaction isn’t fraudulent
- It’s a real invoice tied to a real buyer
- The customer won’t initiate a chargeback
As a reward for lowering their risk, Visa/Mastercard lowered the interchange rate.
So implementing Level 2 and 3 processing can lead to significant savings over time.
For example, if you’re a B2B company selling $10,000 invoices, Level 3 processing can lower your interchange rate by 0.50% or more. That’s a savings of $50+ per transaction.
100 transactions a year equals $5,000 in savings!
Negotiating Lower Processing Rates
High-volume businesses can negotiate better rates with their payment processors. Review your processing statements and discuss discounts or custom pricing based on your transaction volume.
Note, volume isn’t the only factor. Low chargebacks, business type and industry risk also play a role in your negotiating power.
Choosing the Right Pricing Model
The second way to save on processing fees is to select an appropriate pricing model. The biggest ones:
- Interchange-Plus: Offers transparency and can be cost-effective for businesses with varied transaction types.
- Flat-Rate: Simplifies budgeting but may not be the most economical for high-volume or high-ticket transactions.
Encouraging Alternative Payment Methods
Lower-cost payment options can also reduce fees:
- ACH Transfers typically incur lower fees than credit card transactions.
- Wire Payments: Suitable for large, one-time payments.
- E-Checks: Digital versions of traditional checks, offering convenience and cost savings.
Offering discounts for these ways of payment can incentivize businesses to choose them over credit cards.
Best Credit Card Processors for B2B Transactions
Selecting the right payment processor is crucial for managing costs and ensuring efficient operations. Here are some top choices:
- Paystand: Offers zero-fee blockchain-based payments and automation tools.
- Braintree by PayPal: Provides robust APIs and supports various payment methods.
- Stripe: Known for its developer-friendly platform and comprehensive features.
- EBizCharge: Specializes in B2B transactions with ERP integrations.
- Versapay: Focuses on collaborative AR and integrated payment solutions.
Here’s a table comparing features of each:
Features you want to look for in a B2B Payment Processor include:
- Transparent Pricing: Clear breakdown of fees.
- Security Measures: Compliance with PCI DSS and advanced fraud detection.
- Integration Capabilities: Compatibility with your existing systems.
- Customer Support: Responsive and knowledgeable assistance.
Compliance and Security Considerations
One of the most important compliance and security features is PCI DSS Compliance for B2B Transactions. Following the Payment Card Industry Data Security Standard (PCI DSS) is required for any business.
Larger transactions, sensitive business data, and longer sales cycles, means your systems should be both secure and compliant.
PCI DSS Compliance for B2B Transactions
The Payment Card Industry Data Security Standard (PCI DSS) outlines a set of rules that every business must follow if they accept credit card payments. For B2B companies, compliance requires extra diligence due to higher transaction values and the use of stored card data for recurring payments.
To stay compliant, businesses must:
- Use encrypted payment systems
- Limit access to cardholder data
- Regularly monitor and test network security
- Maintain a formal information security policy
Most top payment processors offer PCI-compliant solutions built into their platforms, which reduces your risk and simplifies audits.
Fraud Prevention and Chargeback Management
Chargeback fees eat away at your profit margins, especially in high-ticket B2B transactions. Preventing disputes starts with fraud prevention.
Tools to protect your B2B payment flow include:
- Tokenization – replaces card numbers with non-sensitive tokens
- Encryption – protects card data during transmission
- 3D Secure & AVS – adds extra authentication layers
Some payment processors also offer automated chargeback alerts and pre-dispute resolution tools to minimize losses.
Secure Payment Gateways and Tokenization
For online and recurring credit card transactions, using a secure payment gateway is essential. Gateways are the frontline between your business and the credit card network, and they capture and transmit payment data.
Advanced features to look for:
- Tokenization to minimize risk when storing card data
- Gateway-level fraud filters
- Real-time reporting and batch reconciliation for accounting teams
A well-integrated gateway ensures security but also smooths the payment experience for both your team and your customers.
Future Trends in B2B Credit Card Processing
The world of B2B credit card processing is always evolving. To stay competitive in your space you need to know what’s coming…
The Rise of Virtual Cards and Automated Payments
Virtual cards are digital card numbers issued for one-time or limited-use purchases. They’re becoming a go-to for B2B payments.
Why?
They enhance security, streamline approvals, and help automate accounts payable processes.
Platforms like Stripe and Airbase already offer virtual card services that integrate with spend management systems, which reduces the need for manual tracking and reconciliation.
Automated payments are on the rise too. Especially in subscription and SaaS-based B2B businesses. These systems reduce errors, lower admin overhead, and improve cash flow predictability.
AI-Driven Fraud Detection and Risk Management
Artificial intelligence is transforming fraud prevention. By analyzing thousands of data points in real time AI can flag suspicious activity faster and more accurately than human systems.
Benefits of AI fraud detection include:
- Reduced false declines
- Early warning systems for new fraud patterns
- Adaptive security based on risk profiles
AI is also improving underwriting and onboarding which is helping payment processors make smarter risk decisions for B2B clients.
Blockchain and Cryptocurrency in B2B Payments
Blockchain, Bitcoin and cryptocurrency are becoming mainstream. Companies like Paystand are starting to create blockchain-backed payment networks that offer:
- Faster settlements
- Lower processing costs
- Transparent, auditable payment trails
For international businesses cryptocurrency can also lower exchange fees and faster cross-border payments. Even though it’s still in the early stages this technology could reshape how large B2B payments are handled in the near future, which means you might have to adapt.
Conclusion
Managing B2B credit card processing fees is one of the smartest ways for a company to protect its margins and streamline its operations.
From understanding interchange fees and assessment fees to choosing the right payment processor, the decisions you make around payments can significantly impact your bottom line.
If you take away nothing else from this guide, remember these key takeaways:
- B2B credit card transactions have higher stakes and unique structures compared to B2C
- Knowing the components of processing fees helps you identify cost-saving opportunities
- Using Level 2/3 processing, negotiating rates, and encouraging ACH payments can reduce costs
- Selecting the right payment gateway and processor is key to security, compliance, and efficiency
- Trends like AI, blockchain, and virtual cards are evolving the future of b2b credit card processing and will keep you on your toes
Final Tips:
- Always read the fine print in your processor agreement. Look for hidden credit card fees and chargeback fees
- Don’t be afraid to switch providers if you’re overpaying on transaction fees
- Evaluate tools that integrate payments with your ERP, CRM, or accounting systems
Partnering with a trusted payment processor who understands your B2B needs can make all the difference.
That’s why at Cash Swipe, we’ve successfully helped thousands of business owners save on their processing fees.
Not by implementing a ‘typical program’ where the merchant pays all transaction fees.
But eliminating ALL those fees by offering a cash discount program.
By giving a customer the choice to get a ‘discount’ with a card or pay 2-4% more with cash you can legally pass down the cost to the customer.
Over 1000 agents at Cash Swipe are offering this program to business owners and make passive income from each transaction!
Our top students make 3k-10k+ in residual income monthly from placing credit card machines inside local businesses.
If you’re an entrepreneur, investor or 9-5er looking to help business owners save while making residuals…
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