Interested in B2B payment processing methods? FLO Business Solutions is here to cover your options. Learn the ropes below!
What is “B2B” compared to “B2C”?
If you’ve heard of B2B, you’ve probably come across B2C as well. The question is: What sets them apart?
Answer:
B2C: “B2C” refers to business to consumer. This is the type of business that sells directly to individual consumers. Think small businesses on Etsy, for example, or big businesses that sell large quantities of product to large quantities of customers. While each approach has its pros and cons, when it comes to payment processing, conventional wisdom is that B2C is easier than B2B. At least on the business’s end.
B2B: “B2B” refers to business to business. Rather than selling to individuals, you’re selling to your fellow businesses. Often, this means selling larger orders. While this can be high reward, it also adds a bit of complication on the payment processing end. When selling business to business, you’re often trying to maintain longer-term relationships. You want repeat orders, and a part of that involves ensuring that payments are processing accurately and on time. Trust is key. As such, it’s crucial that you master B2B payment solutions.
What makes B2B payments different from B2C payments?
A few factors set B2B payments apart from B2C payments. Much like B2B is fundamentally different from B2C on a broader level, B2B payment processing has different needs.
Keep in mind that B2B marketplace payments tend to require more time. The amount of money involved can be a lot higher than it is with regards to individual consumers. This means the approval and settlement of the payment can take longer—days or even weeks. In short, you’re generally going to require more complex payment software for B2B than you would for B2C.
What is the B2B payment processing method?
There isn’t one type of business to business payment method. Rather, the marketplace offers a few different options to business owners. In fact, some B2B sellers prefer to offer their clients multiple options. Not only does this expand your potential client base—it can also help ensure repeat business. Of course, this means you’ll want to work with a vendor that can match your needs as well.
Some of your B2B payment options include:
- Virtual business to business credit card processing
- ACH payment processing
- Digital wallets
- Electronic checks (eChecks)
- Wire transfers
- Commercial credit cards
- Paper checks
Needless to say, some of these options are more common than others. You don’t see quite as many B2B sellers accepting paper checks these days! But nonetheless, your operation is your operation, and it’s important to familiarize yourself with the pros and cons of multiple solutions.
How do B2B payment processing solutions work?
Commercial credit cards. One of the most popular B2B payment solutions, commercial credit cards, remain quite common. Although they come with processing fees, buyers fall back on them often, in part due to their familiarity and reliability. As a seller, however, you may run into a few drawbacks. Each credit card transaction costs the seller, which naturally adds up over time. Still, it’s difficult to decline credit card payments, simply because of their prevalence.
Want to accept business payments while cutting down on credit card fees? You have options. New technologies help reduce manual processes, creating a more automated system that increases cash flow. Rather than focusing on credit card payments, you and your team can focus on more high-level endeavors.
ACH (Automated Clearing House). Another common B2B payment processing method, ACH, allows you to process payments electronically. It’s quick, convenient, and affordable. Essentially, ACH connects businesses across the United States. It transfers funds from business to business, even when those businesses use different banks. It’s possible to utilize ACH transfers internationally, but intermediary verification can slow the process down.
Wire transfers. Although not as popular domestically, wire transfers do remain more common than ACH when it comes to international payments. We usually manage wire transfers through RTP, CHIPS, or Fedwire. The great thing about this method is that as soon as the money hits the target account, it’s available. However, its lack of security presents concerns for B2B sellers and buyers.
Frequently Asked Questions
Still have some questions about B2B payment processing? Luckily, we have some more answers!
How do virtual credit cards differ from commercial credit cards?
Functionally speaking, virtual credit cards don’t differ too much from their physical counterparts. You can place limits on how often they’re used and by who, and they tend to be very secure. They may come with similar expenses associated with physical B2B card processing. But similarly to physical cards, we can potentially cut these expenses with more recent technology.
What’s the difference between eChecks and paper checks?
Aside from the obvious differences—one is electronic, while the other is paper—eChecks tend to be faster. Plus, they’re less expensive to manage than paper checks. They offer all the conveniences of any digital payment methods, with fewer drawbacks than paper checks.
All that being said—B2B sellers use paper checks surprisingly often, more so than the average individual consumer. Why? We’re not quite sure. It could be simple habit, or a sense of comfort that comes with a physical payment. However, digital methods are easier, often less expensive, and generally more secure. As you process large payments and scale up your ecommerce business—while working with clients who may not be physically close to—you’ll have more options with digital methods.
What are the benefits of Level 2 and Level 3 processing?
Since there is more information about a transaction and thus additional transparency and security, Level 2 and Level 3 processing have a few additional benefits. These include:
- Lower interchange fees
- Easier tracking and verification
- More data collection points
- Better compliance
Which method is right for me?
That depends greatly on your business and your goals! Fortunately, FLO Business Solutions is here to help you find the perfect solution. Get in touch with us here or call (803)-887-7356. Let’s find the perfect B2B payment platform for you.
Are you considering investing in a credit card terminal? If this is your first physical payment processor, it’s a big deal! For many small business owners, buying or upgrading a credit card terminal coincides with growing your business. Often, business owners move from selling purely online to in-person, physical sales. Otherwise, you may be shifting from a more informal format to something that serves you beyond simply processing payments.
Whether you’re buying your first machine or moving on to something more advanced, there’s a lot to choose from. No worries—we have you covered. Let’s dive into the world of credit card readers. Consider this your primer from FLO Business Solutions!
What is another name for a credit card terminal?
When you first begin researching your payment processing options, it’s easy to experience confusion over the terminology. It’s actually a lot less complicated than it may seem, however. There are actually several different terms you can use instead of credit card terminal. They include:
- Card reader. This is a little less formal, and may be more familiar to casual customers.
- Credit card machine. Goes without saying, right?
- Point-of-sale (POS) system. One of the most widely-used terms, we often use this to refer to credit card terminals on a more formal level. Plus, a POS system is a system—it includes the physical terminal, but can go beyond it.
No matter what you call your system, it’s important that you know its capabilities and limitations. It’s a good idea to write down everything you need from a payment processor before beginning your search. Generally speaking, you’ll want as much freedom as possible when using your credit card reader. Don’t settle for a system that does the bare minimum. Make sure you’re using a system that’s up to date, with a support system you can trust. That means talking to real people when you have questions.
What is a smart card terminal?
Here’s the thing: there’s a traditional card reader, and there’s a smart card terminal. You most likely have a “smart” card right now—it’s the card that uses a chip. A smart card terminal can read that chip quickly and reliably. There are two main types of smart card readers.
- The contact model. This model requires customers to insert their cards into the device.
- The contactless model. In this case, the reader relies on radio frequency. All the customer has to do is tap or hover their cards over the readers, and they’ll be good to go.
You can also procure a terminal that combines the contactless and contact models. When you offer both options, you’re essentially insuring your sale. If, for whatever reason, one method proves tricky for the customer, you have a backup.
Keep in mind that the contactless model is the most advanced at this time, and can be more convenient for customers in a hurry.
How do I get a credit card terminal for my business?
Typically, you’ll procure a credit card terminal from a retailer like FLO Business Solutions. Keep in mind, however, that you don’t want to work with a faceless company. Even the simplest of payment solutions come with learning curves, and you’ll want to make sure you can reach out to real people if you have questions (what is Clover, anyway?). At FLO Business Solutions, we ensure that you’ll always have someone ready to help—no matter what.
Additionally, you want to make sure that the company you work with can help you scale up as
needed. The more your business grows, the more you’ll rely on not only your payment methods but the company supporting them. If you can get everything you need—from machines to support—in one place, you’ll be off to a a great start.
Frequently Asked Questions
Do you still have some questions about finding the best credit card terminal for your business? Below, we’ve listed some things our customers frequently ask.
What are virtual terminal card processing systems?
A virtual terminal card process system is one option available to small business owners. Rather than working with a physical card reader, a virtual reader allows you to work off (basically) any device. This increases your flexibility, and can be easier for some businesses as they grow. Often, you can acquire a virtual POS system from the same company that handles your physical machines (if you choose to have both).
What is a mobile credit card machine?
People carry their credit cards everywhere in this day and age. That means you need to be able to meet them anywhere, right? A mobile credit card machine allows you to set up shop at trade shows, pop-up markets, and more. You’re not stuck in one place, and can sell your services or products wherever you wish. Plus, they’re lightweight and simple to use.
Can I use mobile credit card readers with my phone?
The short answer: Yes.
The longer answer: In some cases, you may integrate mobile credit card capabilities with your personal devices. This is where a credit card machine for phone comes in. Rather than working with a bulky machine, all you have to do is handle a small device. It’s easily attached to and from your phone, and empowers you to run your business wherever you need.
Contact FLO Business Solutions Today!
We know moving on to a new payment processing system can seem like a lot of work. But if you collaborate with the right company, you’ll get the guidance you need. At FLO Business Solutions, we’re here to assist. Call us at 803-887-7356 or connect with us here. Start upgrading your business today!