7-11 and other B2C merchants, who have long been accepting credit cards, have recently started protesting against the 1.5-2% merchant fees charged by banks for processing credit card payments. That being the case, you might find the title of this post a bit strange and wonder why we’re recommending B2B suppliers to start accepting credit card payments now.
Seasoned B2B sellers know that, even in the B2B world, there are many ticket sizes that are small enough to fall within the approval authority of VP-level of employees in many midsize to large customer companies. As a result, VPs can strike a deal quickly and make payments in a few minutes by using their credit cards and claim the expense back from their company via their regular claims reimbursement process.
As a result, credit cards deliver a highly frictionless buying experience.
As a matter of fact, for cross-border transactions that involve the flow of goods or services across national borders, the ability of the supplier to accept credit card payments might decide the fate of the sale itself: Accept credit card, the sale happens; refuse credit card, the sale goes for a toss.
On the other hand, if the supplier is unable to accept credit card payments for whatever reason (e.g. issues being faced by PayPal in India, more on that in a another post), the extent of friction found with most other payment methods might actually derail the sale, as we found out during a recent transaction with an American company:
- Electronic Fund Transfer (“Wire”). According to the customer’s company policy, only the Group Chairman was authorized to initiate wire transfers. It took a few days for him to find the time for this activity amid his busy schedule. When he finally got around to doing it, we were shocked to hear from him that their bank – a local community bank in Virginia, USA – had no clue how to process a cross-border payment involving BIC and other terms it was hearing about for the first time. Unbelievable, but true!
- Western Union / MoneyGram. Since this option can be used to only make payments to an individual, and not a business, it was principally unsuitable in the present B2B context.
- Check. While this was the option that eventually worked, it took almost 30 days for the money to be credited to the company’s account. Besides, it attracted hefty charges to FedEx the check from the US to India and a payment processing fee of almost 1% of the transaction value.
While our experience might be one-off and hardly representative for many B2B payments, it does illustrate why B2B suppliers in certain circumstances should strongly consider accepting credit card payments.
As the North American distributor Banksys Point of Sale (POS), the BNA has assembled a world class team of professionals dedicated to providing intelligent payment solutions. Intelligent Technology Solutions Smart Business
merchant accounts
accept credit cards
hardware…
[…]Why B2B Suppliers Should Accept Credit Cards « Talk of Many Things[…]…
social media marketing Copywriter,cheap Freelance copywriter,Californa Website copywriter,Californa SEO copywriter,cheap SEO copywriting,direct response Copywriting services,Californa website copywriting,direct response sales letters,direct response …
[…]Why B2B Suppliers Should Accept Credit Cards « Talk of Many Things[…]…
Pingback: Is The US “Closed Loop” Payments System Making Americans Less Creditworthy? « Talk of Many Things
I love looking through a post that can make people think.
Also, thanks for allowing for me to comment!