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10 min

B2B payments: Should you accept B2B credit cards?

Considering accepting B2B credit cards but unsure if it’s the right move? Explore key factors to help you decide if B2B credit cards align with your B2B payment strategy.

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A smiling professional woman in an office setting holding a credit card while using her smartphone, with a laptop and a colleague in the background.

Close your eyes and think about the last time you wrote a personal check. If nothing comes to mind, it’s probably because the use of paper checks for consumer payments has never been lower.

In 2023, the average US consumer wrote just one check, the whole year. 

But, if you look at B2B transactions, the picture is quite different.

The B2B payment method conundrum

While paper checks are in decline, nearly a third of the value of B2B payments in the US are still made by cash or check.

A stacked bar chart comparing B2B transaction methods in 2019 versus 2024, showing a significant increase in ACH payments and a decrease in check and cash.

In other words, people who haven’t written a personal check in years are still writing and accepting commercial checks for B2B payments.

Why is this the case? It probably has a lot to do with the cautious nature of business. 

Business owners who have always accepted checks may be reluctant to try something new. And customers who are used to paying by check may not see a need to get out of their comfort zone and switch their payment method.

But perhaps you and your B2B customers are both missing out on the flexibility and benefits of accepting credit cards. Which leads us to question: what if checks are not the be-all-end-all of B2B payments?

Let’s explore this idea further.

What’s so bad about checks, anyway?

While they are familiar and widely used by businesses, paper checks also have quite a few disadvantages.

They’re expensive

Most people don’t think about the cost of paper checks. But if you take into account labor, bank fees, paper, and postage, each check costs your business between $4-$20. The recipient also spends around $1-2 to accept a check. That adds up to a lot of money for both parties involved.

They’re an inconvenience

Checks, especially when written by hand, take extra time and effort. You need to order checkbooks (an expense in itself) and write the checks, taking care not to make spelling mistakes or other errors. Then, you need to envelope them, arrange postage, and physically deliver them to the mailpost. Waiting for a check in the mail is not just inconvenient—in today’s world, it seems positively archaic!

They can get lost or stolen

Physical checks must be transported from place to place, so they are uniquely prone to getting lost or stolen. In recent years, an increase in attacks on postal services has even prompted experts to warn people to avoid mailing checks whenever possible. 

They raise safety concerns

Checks expose the payer’s identity, bank details, address, and signature for anyone to see, opening the door to check fraud and identity theft.

How common is check fraud? According to the Association for Financial Professionals, 65% of organizations experienced check fraud in 2023, making it the payment method most vulnerable to security breaches.

Why your customers may prefer B2B credit card payments

There are other payment methods out there, but credit cards come with unique benefits, making it a favorable payment option for consumers and businesses alike.

Here are three of the main benefits cited by B2B customers who choose to pay bills with a credit card:

Extra float

No business can thrive for long without positive cash flow. For this to happen, businesses must carefully balance between paying their bills on time and ensuring there’s enough money left to cover other expenses, including unexpected costs and growth opportunities.

Paying with a card lets businesses hang on to cash longer without damaging their vendor relations by paying late. That’s because the vendor receives the credit card payment right away, while the payer is charged only on the next billing cycle. This means up to 60 days of additional float, which goes a long way for a small business waiting for incoming payments to clear.

Paying with a credit card can be like taking a short-term loan without applying for one or affecting the business’s credit score. This comes especially handy for unexpected or large payments.

Card rewards

All businesses have expenses (and some businesses have a lot!). But who said businesses can’t enjoy points, miles, and cashback on these payments, just like individual consumers do?

By paying with a credit card, B2B customers have the opportunity to earn rewards and perks from their business expenses.

Tracking

Paying B2B bills with a card makes it easy to track business expenses and make sure nothing is overlooked. This comes in handy during tax season, and also allows business owners to keep a closer eye on spending throughout the year.

Why accepting credit cards for B2B transactions is good for you

We’ve covered why your customers want to pay by card but, what’s in it for you? Glad you asked! Here are the top ways accepting a B2B charge on credit card helps your business.

An infographic illustrating three benefits of B2B card payments: getting paid faster, improving customer relationships, and increasing sales, featuring playful line-art characters.

Get paid faster

The convenience of paying with a card makes it easier for customers to pay on time or even early. Plus, there’s no more waiting around for a check to arrive.

Credit card payments are also processed more quickly than checks or bank transfers. By accepting credit card payments, you can receive the money almost instantly, which is good news for you.

Improve your relationships with customers

Taking your customers’ needs into account and providing them with their preferred payment method helps to build trust and loyalty, which paves the way for smoother, easier relationships.

Give your customers more options for how to pay, and they will thank you for it! Credit cards are one example of a flexible payment method you can add to the mix, as well as ACH bank transfer, which is a low-cost payment method preferred by many business customers.

Increase sales

Don’t risk losing a sale because you can’t accommodate a customer who wants (or needs) to pay with a credit card. Accepting credit card payments increases your potential sales by appealing to a wider audience. Especially if many of your competitors only accept checks, cash, or bank transfers, then accepting credit card payments gives you an important competitive edge.

The role of B2B credit cards in B2B payments

There are several types of B2B payments that customers can choose from when paying a business bill:

  • Paper checks
  • ACH/ direct deposit
  • Cash
  • Wire transfers
  • E-checks
  • Digital wallets
  • Credit card

B2B card payments offer several benefits that may be uniquely tempting to business owners, including: 

  • Online/digital payment method
  • The ability to pay vendors instantly, without immediately impacting cash flow 
  • Easy tracking of expenses
  • Rewards and cashback
  • Premium perks, such as airport lounge access or discounts for business services

In short, B2B credit cards play a key role in B2B payments by enabling businesses to provide an additional payment method for customers that is streamlined, convenient, and secure. While not the most popular B2B payment option, it is still very common, and more businesses today are choosing to offer it to their B2B customers.

Factors to consider for B2B credit card processing

If you are considering accepting B2B credit card payments, there are some considerations that will impact your business. Here are three things to remember about B2B credit card processing:

  1. Transaction fees: Credit card processing comes with certain fees and charges. High processing fees can impact the viability of credit card payments, so it’s important to choose a processor with competitive rates. 
  2. Security: Credit card fraud is one of the most common types of fraud in the US, so it should be a real concern for businesses. Choose a payments processor that adheres to security standards, such as PCI DSS, to protect sensitive financial information and ensure your credit card payments are secure.
  3. Integration with your existing systems: If you choose to accept credit card payments, you need a processor that integrates seamlessly with your existing accounting and CRM software. Before choosing a payment provider, assess compatibility with your current systems so you can achieve a smooth and efficient payment process.

How much does accepting credit cards for B2B payments cost?

The average processing fee for credit card deals ranges between 1.5% and 3.5% depending on the service provider and the type of card used.

If you use Melio’s online B2B payment platform, you can send or receive payments by credit card at a fee of 2.9% of the transaction (and to accept payments, you can choose who covers the fee – you or your customers). Plus, if your business has a credit card payment line of over $100,000, you may be eligible for a special rate on credit card fees. 

What is B2B payments processing, and how can you reduce B2B transaction costs?

Simply put, B2B payments processing enables the transfer of funds between businesses for goods or services rendered. 

For example, an interior designer contracts an electrician to rewire a home and install new lighting. The electrician accepts credit cards via Melio, so the designer can pay the invoice online with a credit card. Melio is the payment provider, facilitating the electrician’s capability to accept credit cards and enabling customers to pay by credit card if they want to.

Compared to B2C transactions, B2B payments may involve larger sums and more complex terms, although not always. B2B bills can also be small, such as a catering company that provides fruit platters for business meetings. A B2B customer who orders one fruit platter may want to pay by credit card, even if the amount is not large.

One thing that all B2B payments have in common is fees. Almost all transactions have some form of a fee (except ACH payments with Melio, which are free!). Here are some ways to reduce B2B transaction costs so the impact of payment fees is minimized:

  • Negotiate better rates with payment providers: If your bank or payment processor is open to negotiations, try to secure lower transaction fees and better terms. If you have a high volume of transactions, this could be a way to convince them to offer a discount.
  • Use ACH transfers: ACH transfers are typically cheaper than wire transfers, checks, and credit card transactions. If customers want to pay by ACH, this is a good option and you can encourage it. However, if paying by credit card is their preferred choice, then it might be worth covering the higher fees to make them happy.
  • Use a digital payments platform: Online invoicing and payment platforms help to reduce the costs of paper checks, postal delays, and manual processing. Melio, for example, offers competitive processing fees. Also, you can easily track accounts payable and receivable, and schedule automated payments, helping to avoid overdue bills and late payment penalties.

What are you waiting for?

Managing your incoming payments and accounts receivable (AR) online with Melio means you can start accepting credit cards from B2B customers today. It’s a win-win: You get the money faster in your bank account, while your customers enjoy the flexibility and convenience of choosing their preferred payment method.

Take a few moments to sign up for Melio for a better way to get paid.

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.

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