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Q&A Forum

B2B credit card payments

Do you use your Corp Credit Card to pay expenses? If so, why? On the flip side, do you accept credit cards for B2B payments, and again if so why? If you accept credit card payments, do you permit them at the end of credit terms or only at time of sale? What is the effect of the discount rate (swipe fees) on your bottom line?

Answers

Topic Expert
Anand Goel
Title: CEO
Company: Optimized Payments Consulting
(CEO, Optimized Payments Consulting) |

in our experience as payments consultants, we see that some firms accept business card payments because 1) they get requests from their customers, 2) competitive differentiator, 3) increased fash flow (lower dso). Many large corporates are pushing their vendors to accept their p-cards/virtual cards because they want to streamline their payables and more importantly, because they want to earn 1.0% to 1.5% in interchange rebate from their card issuer.

From a vendor's perspective, the cost of accepting card payments is the biggest hurdle. Unsophisticated vendors have their cost of card acceptance range from 3.0% to 5.0%. However, sophisticated merchants have their cost of card payments range from 2.3% to 2.7%.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

We pay for most MRO items using P-Cards. It reduces our efforts around purchase orders and processing invoices. We don't accept cards as most customers don't want to hear that their price will go up based on the fees we will pay.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Smaller businesses mayuse P-cards/credit cards as a way to finance payables, based on the interest free credit period on the card before payment is required. If the owner wants to earn loyalty miles/points, that can also explain use of the card.

Christine Speedy
Title: Authorized Reseller of Payment Services
Company: 3D Merchant Services / CenPOS
(Authorized Reseller of Payment Services , 3D Merchant Services / CenPOS ) |

Yes, to pay expenses; picked card years ago due to rewards for business (fuel and office supply discounts, travel coverage etc)
Yes, to accept credit cards for B2B payments; needed a way to get paid faster than waiting for a check in the mail. They're now offered to all customers at time of sale. All products are priced with credit card fees built in. Customers are sent invoice with that price, and can get a 2% discount if paid via ACH. So there's no impact on bottom line.

Topic Expert
Brenda Goudey
Title: CFO/VP of Finance
Company: KDR Designer Showrooms
(CFO/VP of Finance, KDR Designer Showrooms) |

We purchase inventory on credit cards from vendors who allow it to earn miles. We have cards from multiple airlines and earn enough miles to cover all of the corporate travel. We pay the card balance in full each month so as to not incur any interest charges, but even with that we're still extending the payments another 30 days.

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