In 2024, the volume of business-to-business (B2B) card acceptance in the U.S. is estimated at ~$2.T. While “Enterprise” merchants provide most of this volume, we are seeing more mid-market and small merchants accept B2B card payments.
From 2000 to 2010 B2B merchants were a challenge for most acquirers, with complex demands as well as the perception that card acceptance was too minimal to justify the sales efforts. With the “Great Recession” and the proliferation of virtual commercial cards, almost every merchant now accepts a B2B payment.
But selling to B2B merchants requires a decidedly different skill set from B2C merchants. Selling B2B primarily involves discussions with the Chief Financial Officer, Controller, Treasurer or Bookkeeper, not necessarily the business owner.
The sales cycle is significantly longer for B2B, with merchants requiring months of interaction. Sometimes B2B merchants expect a proposal, a formal presentation, and technical conversations to address any developmental roadblocks.
Even with these distinctive challenges, there are benefits to selling B2B.
- B2B merchants have more processing volume than B2C merchants
- B2B merchants have a longer merchant life
- These are contractual relationships that usually involve some integration that improves retention
Once you have decided to invest the time, money, and resources to sell to B2B merchants, the first step is to identify the solutions that are devoted to B2B:
- Integrations with an Enterprise Resource Planning system (ERP)
- Ability to process both Level II/Level III and Data Rate II/III interchange categories
- Automated reconciliation to the invoice
Next, there needs to be additional training specific to the B2B salesperson to understand the answers to these questions:
- What is the percentage of card payments today?
- What is the percentage of ACH? Check?
- Does the buyer get to choose?
- When will you only accept ACH or Check?
- How do you collect payments today?
- Do you use an accounts receivable solution?
- Electronic Invoice Presentation and Payment (EIPP)?
- ERP?
- Gateway?
- Do you use an accounts receivable solution?
- What is the average dollar amount of your card transactions?
- Are there any timing restrictions on card payment?
- Do you understand all the methods to optimize interchange?
- How do you reconcile card payments to invoices?
The salesperson’s first responsibility is to ask specific questions and listen to the answers. Since B2B merchants involve numerous interactions, providing an optimal solution is the most important task for the salesperson. This is not happening in the first meeting.
This consultative sales approach transitions the salesperson to a trusted advisor. As a trusted advisor, the salesperson needs to use the information from the merchant, identify pain points, and use a set of solutions to provide the optimal solution. Key elements of a B2B solution include Straight-Through Processing, Electronic Invoice Presentation and Payment, Electronic Data Interchange (EDI) remittance, and variable interchange programs (including negotiated interchange).
A working knowledge of B2B merchants (or merchants that may accept B2B payments) and how it benefits a merchant is essential when discussing solutions with a B2B merchant. To be a trusted advisor, you should find a trusted advisor.
TSG is the leading consulting company in the payments industry that has extensive experience, expertise, and exposure in B2B on both supplier/merchant acceptance and buyer/accounts payable payments. Reach out to discuss the best way to navigate B2B.