Understanding B2B Merchant Account Service
Very merely, B2B merchant account service is the payments made between companies. For example, A restaurant owner might pay a supplier for fruits and vegetables, meats, and more. An IT company is paying for the servers and other major services to the associated partnered service providers. A startup tech company might make a payment to AWS for its servers. Any time one business manifests another business, it requires a Business to Business merchant account for the payment. The b2b transactions are growing and improving at a more gradual rate in comparison to the other consumer payments that are currently being used and growing rapidly.
At present, around 33 percent of businesses are still relying on traditional check methods for funds transfer, while with the help of advanced electronic payments method, around 67 per cent of all the transactions are being done digitally. Around 16.5 trillion dollars were accounted in 2014 by the United States in which around 4.26 trillion dollars of transactions were international, and around 12.24 trillion dollars were local transactions. And as per the expert’s analysis, the financial year 2020 market is about to reach 23.1 trillion dollars. These figures become tremendously more in terms of worldwide transactions. Global B2B payments are expected to reach $218 trillion by 2022, resulting in benefit with improved organizational efficiency, faster payments, better customer experiences.
The State Of B2B Merchant Account Service
The U.S. merchant account market will grow from $16.5 trillion to $23.1 trillion by 2020 with enjoying a 5.8 per cent CAGR over that period. On average, roughly 75 per cent payments solutions are domestic, and 25 per cent are international with most of those transactions going to China, Canada and Mexico.
As per the expert’s study, around 1 billion dollars revenue will be generated by the 61 per cent of the medium-sized as well as small businesses that use a b2b payment processing solution for the transactions.
Business Credit Card Processing Works On A Three Level System Also Called Level 1, Level 2, And Level 3.
- Level 1 payments. It requires very few amounts of information for the transaction because it is usually used for the business to consumer transactions processing.
- Level 2 payments. These include the payments done for the investments of businesses with the help of the corporate cards. Without any special requirements level, two transactions can be processed. For b2b credit card processing, there are several more pieces of information needed to process the transactions.
- Level 3 payments are purchase cards that are used by large corporations and government agencies. This requires to pass more than twenty data elements to furnish for the lowest processing rate.
Level 2 and Level 3 cards are deprecated when required information details are missing.
That’s why it is necessary to gather all the requirements to process the transactions are interchange rates with a very low fee.
Benefits Of Obtaining A B2B Merchant Account Service
There are several reasons to switch to a b2b merchant account service. b2b product or service works faster and optimized with several billing and payment applications which increase the overall cash flow for your business.
Improve Cash Flow
The biggest reason in terms of business failure is the difficulties in the cash flow. By utilizing the b2b transaction method, you can easily see all the patterns of your cash that is coming and outgoing, which can’t be easily possible with the traditional paper check method of payment.
Clarify Taxes and ease of Bookkeeping
With the help of advanced accounting software, you’re all of the b2b merchant payments are recorded and stored in the database, which helps you to calculate and check all the transactions in the backdate. Many also combine with your accounting software to make tax filing and Bookkeeping easier.
Preserves Capital and saves your Time
B2b payments service saves your vital time and efforts for you as well for your clients. Your client doesn’t need to draft and post a check to you. And you don’t need to collect and deposit the check, and a hard-copy check costs about $2 per check. This can add up from hundreds to even thousands of dollars over time as an increase in the number of check transactions.