Increase working capital with Commercial Card Optimization

Buying organizations are increasingly looking for convenient and innovative payables solutions that can improve visibility, security, efficiencies and savings. This has been demonstrated in the rise of commercial cards, including fleet, corporate and purchasing cards.

Sellers also realize many benefits from accepting commercial cards in-person and online. It streamlines acceptance processes, eases the demands on staff, reduces days to receivables and improves the customer experience. The downside for sellers, however, is that commercial cards often have the highest interchange rates of all card types.

Addressing the interchange fee challenge

Yet there is a way that sellers can address this challenge. Businesses and government agencies that accept a large volume of commercial card payments can reduce related expenses through Commercial Card Optimization.

Capturing additional transaction details, often referred to as Level 2 and Level 3 data, at the time of payment helps better authenticate the transaction and provides useful information for the card issuer. As a result, transactions carry less risk and may qualify those commercial card payments for lower interchange rates set by the card brands.

While business-to-business (B2B) companies and government agencies are an obvious fit for a Commercial Card Optimization program, any business that conducts B2B transactions with vendors, partners, contractors and service providers can benefit. Some examples of B2B purchases are office supplies, computer equipment, telecommunications, shipment and delivery, consulting services and catering.

Commercial card interchange rates vary by card brand, as well as card type, input method and transaction size, but regardless, the savings associated with Commercial Card Optimization add up. Example interchange rates from Visa for eligible commercial cards range from:

• 2.70% for Level 1
• 2.10% for Level 2
• 1.90% for Level 3
• 1.45% + $35 for large ticket transactions over $7,755.56*

Providing Level 3 data is not a guarantee that the transaction will qualify for Level 3 interchange rates. Qualification depends on multiple factors such as card type and the quality of the Level 3 data provided with the transaction.

The complexities of a do-it-yourself approach

The opportunity to save significant acceptance costs through a Commercial Card Optimization program can really add up. However, the challenge of attempting it on your own is that the data required to achieve Level 2 and Level 3 savings is both specific and complicated. Some possible obstacles include:

• All the required data fields, generally 20+, must be completed with valid data. 
• Authorization and settlement must be completed within 24 hours to avoid costly transaction downgrades. 
• Availability and knowledge of staff can result in mistakes that erase any savings, and there are labor opportunity costs related to time that could be otherwise spent on data analysis or other activities to support the business.
• The development or acquisition costs of specialized software can eat into savings.

Maximize savings with a managed Commercial Card Optimization program

Most business leaders want to concentrate on running the business – not optimizing interchange costs. Our Commercial Card Optimization program allows you to tap into the knowledge of payment optimization consultants and eliminate the time-consuming processes and overhead expenses associated with gathering, organizing and transmitting Level 2 and Level 3 transaction data.

• Opportunity to achieve the lowest rates on on all of your eligible commercial card payments with no up-front costs and no change to payment acceptance systems or processes. 
• We pass along valid data at the time of the transaction authorization, so settlement windows are always met. 
• We report interchange savings on your processing statement every month. 
• We help organizations stay fully apprised of changes in card brand rules and interchange rates in the commercial card environment.

Our managed Commercial Card Optimization Service offers our customers a significant savings opportunity. In general, clients have realized a 0.55% to 1.50% decrease in their average commercial card acceptance rates.*

Don’t leave money on the table. An estimated savings from Commercial Card Optimization can be calculated by our consultants, based on your company’s existing payment data.

To learn more about how outsourcing Commercial Card Optimization can help, read our e-book.

* Sample rates for illustration purposes. Refer to Visa and Mastercard interchange tables for specific rates.