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Does anyone know or understand how credit card fees are assesed to B2B merchants?

We are a B2B manufacturing company. Our vendors are requesting to pay on a P-Card. I am not sure how the credit card processing fees from our bank will be assessed or what the fee will be. Our transactions can be very high, at times in excess of $20,000 per transaction.

Merchant services has always been confusing, but now that our larger vendors are requesting to pay on credit card I am not sure what the percentage fee will be and how that will affect margins. Can anyone provide insite on commercial and business credit card fees?

 To be honest, the merchant services industry is confusing and complex.


Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

Credit card fees can range anywhere from 2% to just upwards of 3%; the different card vendors apply different rates which also vary depending on whether various other information is received with the card authorization (address, security code, etc.)

If you are doing high-value transactions this adds up quickly! The same payment done via wire will cost you in the neighborhood of $20, is free if done via ACH, and virtually free if done via check.

There is also the inconvenience of a 2-4 day clearing period before the money is remitted to your bank account.

That being said, most businesses accommodate a paying customer. It's just wise to present the alternative payment options first.

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

Can you some vendors want you to pay them by p-card, or are some customers wanting to pay you by p-card?

Kelvin Arcelay
Title: SVP Security and Risk Management
Company: Private Company
(SVP Security and Risk Management, Private Company) |

It all depends on the process you establish to process the payment. Can you provide more details? Do you have a merchant id, acquiring bank and processing capabilities? Or, are you going to be using a third party?

Stacy Cordier
Title: Managing Partner
Company: SSGT Partners LLC
LinkedIn Profile
(Managing Partner, SSGT Partners LLC) |

You can negotiate fees for credit card acceptance with your merchant bank. As a part of that process, based on your transaction size, you should register for the "large ticket" program offered by both Visa and MasterCard. This will reduce your processing charges by decreasing the percentage of sale charge for interchange and substituting a flat fee.

If accepting a P-Card gets you paid earlier, you may benefit from accepting the card, with the associated fees, in exchange for quicker payment. The part that you need to be careful about, is accepting a P card on extended terms. Companies use the P-Card to manage their own working capital so should be willing to split that benefit with you by paying you at least 30 days sooner.

James Brandon
Title: CFO
Company: Southern CaseArts
(CFO, Southern CaseArts) |

Most likely, your customers want to pay by credit card in order to earn reward points or cash rebates that can be worth as much as 1%. Furthermore, your customers are not likely to pay you any quicker than your payment terms, so you will pay roughly 3% so they can earn 1% or less. Credit card issuers are pushing these programs as a means for payers to cut costs.

If accepting payment by credit card will increase your sales, then you can do the math to see if it’s worthwhile; otherwise, you should resist accepting credit card payments or charge a convenience fee, unless there are mitigating circumstances – e.g., payment is to be made at or near time of shipment, which gets you paid quicker & eliminates credit risk or in situations where you feel the customer may not be able to pay otherwise. I have found the convenience fee to be a deterrent to payers looking to earn reward points or rebates.

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Like Stacy said: negotiate. Avoid vanilla offers as the fees can get very high. Checking with Visa and MC are good starts; another vendor I know of is BluePay which can be found here: I have (in the long past) been able to get rates sub 2% when the quote was for this is *negotiable*.

Fee Fighters ( claims to do the research for you (and they probably get their fee from the winners). I've not used them, so if you try this I'd be interested in your experience.

James has a point that I'd like to restate: if you are not going to save money (ie lay off an AR person you won't need anymore), charge a fee. This is not dissimilar from wire transfers; if I owe you $100, wire you $100 with a "charges theirs" instruction, you will get $80. That is not payment in full and should not be treated as such.

War story: I did a deliberate 1-off of this flavor: we were small software company, they were large, and it was our first transaction and we wanted to get in the door. It got us around the entire license negotiation process and AR/AP process, so accelerated cash by at least 90 days, reduced risk, and accommodated the customer (who subsequently increased their order by 10x). It wound up costing us 4.5% net through paypal. We made it clear, however, that subsequent charges would get billed back. As you might suppose, they paid by wire on the 10x order.

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

Typical card processing fees for Purchasing cards can range from 2.5% to 3.5%. If you demand pass-through pricing and can send Level 3 data for purchasing cards, you can reduce the processing cost down to sub-2.0%. Feel free to reach out if you need more information. Here's an article we wrote last on finding the best processor for your needs -


Philip Mikal
Title: Executive
Company: Small Company
LinkedIn Profile
(Executive, Small Company) |

The fee to accept these types of cards, typically referred to as merchant discount, depends on what you've negotiated with the bank you are working with for card acquiring. They will either charge you a fixed mark-up on their cost, known as interchange plus or will charge you a single fee called a blended rate. It's ideal to negotiate a pass-through pricing arrangement as it will be easier for you to know your true costs, enabling improved management and vendor negotiation.

Purchasing card interchange cost varies widely and can be influenced by whether or not the card was swiped and if your terminal provides line item detail, known as Level 3 data. A full list of interchange is available at the card networks' web sites. Visa, for example:

For large purchases as you suggest, you should become aware of the new Visa Large Purchasing Advantage program, where a $20k transaction would have interchange of 0.70% + $49.50, plus whatever negotiated mark-up you have with your bank.

The mark-up on top of this cost will range widely based on how good of a negotiator you are, your credit rating, and whether or not your account is strategic to the bank. They will generally try to charge you the most they can, but would expect a range of 10-100bps, with 30bps being a ballpark average.

Regarding the firm you mention, there are a handful of similar consultancies that specialize in interpreting your true cost of card acceptance as even pass through pricing can be impacted by various "qualifications" and fees. I generally see only marginal benefit from engaging such a firm until your card transactions exceed $20M annual.

Feel free to PM me for a more detailed discussion.

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