No longer just a customer convenience, offering credit card payments has quickly become a business requirement in accounts receivable for SMEs, medium and large-sized enterprises. Considering this growth in B2B card payments, it’s important to review what rates you are paying and your pricing structure.
There are three main types of pricing structures that payment processing solution providers will offer: flat rate, tiered pricing, and interchange plus. These are offered so that you can determine the best option based on your specific business needs.
Flat rate pricing is a simple and straightforward pricing structure that allows businesses to pay a fixed rate on all transactions, no matter what the value. With this type of pricing, you may be able to avoid incurring extra fees but can sometimes end up paying more per transaction than tiered pricing.
Tiered pricing, or bundling of the interchange fees, works a little differently. The processor charges their processing rates by tier instead of by card type. Those tiers are based off what type of card is being utilized and what kind of processing environment you have in place as well as other factors that would determine how much processing there is per month.
Interchange Plus pricing is the most transparent. Under this fee structure, the merchant pays the true interchange plus assessment fees. The markup from the payments solutions provider is also transparent. Interchange rates range from 0.05% to 2.45% depending on the card type. This fee structure is known as cost-plus or wholesale pricing and it may be the best option to reduce your fees.
eTreem is an Intelligent B2B Credit Card Platform and we want to be your payments industry expert. Our mission is to enhance the credit card experience for all customers by automating processing, reconciliation and accounts receivables posting. We help businesses realize that accepting B2B credit cards doesn’t have to cut hard into their bottom line. We enable organizations to take advantage of lower rates and processing B2B transactions without paying inflated fees.