Cost control strategies for B2B payments in an unpredictable economy

In today’s uncertain economic environment, cost control is more than a financial tactic — it’s a competitive advantage. For businesses in the industrial supply sector, where margins are often tight and transaction volumes are high, managing payment acceptance costs is a strategic way to protect profitability and maintain operational efficiency.

Let’s explore how industrial suppliers, and other B2B organizations, can optimize payment methods, reduce fees and safeguard against chargebacks — all while delivering a seamless customer experience.

Understanding the cost of payment methods

Industrial suppliers typically accept a range of B2B payment methods, including:

• ACH transfers
• Paper checks
• Credit cards
• Wire transfers
• Virtual payments

Each method carries its own costs. For example, credit card processing fees can range from 1.50% to 3.50% of the transaction total. On a $10,000 order, that could mean $150–$350 in fees — costs that can quickly erode margins.

What drives payment acceptance costs?

Interchange fees are paid to the card-issuing bank and are influenced by:

• Card type: Business and rewards cards often carry higher fees.
• Transaction type: In-person transactions are less risky and typically cheaper than online or phone orders.
• Merchant category: Industrial suppliers may fall into higher-risk categories due to large order sizes and B2B transactions.
• Transaction size: Larger orders mean higher acceptance fees.

Let’s explore how acceptance costs are distributed. In general, there are three entities that are paid on each transaction:

1. The card-issuing bank. They receive roughly 90% of the fee.
2. The card brand (think Visa or Mastercard). They receive about 7% of the fee.
3. The payment processor. This is where the other 3% of the fee gets paid.

4 Strategies to reduce payment costs

1. Commercial card optimization

In their B2B payments process, many business buyers use corporate or procurement cards. These cards are convenient but can be expensive to accept. By capturing additional data on qualifying transactions, suppliers can qualify eligible payment transactions for lower interchange rates.

2. Credit card surcharging

Suppliers can offset rising costs by passing a portion of the credit card fee to the customer. This strategy requires:

• Compliance with card brand surcharge rules and regulations
• Clear communication with customers
• Application only on credit card transactions, as you cannot add a surcharge on debit cards

3. Accept alternative payment methods

Encouraging ACH, wire transfers or checks in the B2B payments process can save you the cost of paying the interchange fees. However, each method has trade-offs:

• Checks: Labor-intensive and prone to fraud
• ACH: Lower cost but slower processing time compared to a payment card. It also requires additional banking information from the client.
• Cash: Rare in B2B payment processing but still used in some local transactions, is prone to theft and incurs handling fees

Tip: Convert paper checks to ACH to reduce manual processing and speed up fund availability.

4. Integrate your payment systems

Integrating your ERP or inventory management system with your payment platform improves efficiency, reduces errors and enhances fraud protection. It also streamlines reporting and improves the customer experience.

Managing chargebacks in B2B transactions

Chargebacks are less common in B2B payment processing but still pose a risk, especially with large, high-value orders. They can take months to resolve and often result in lost revenue and strained customer relationships.

Common causes

• Incorrect billing, including unclear billing descriptors or duplicate charges
• Disputes over delivery timelines or product quality
• Fraudulent transactions or unauthorized purchases

Prevention tips

• Use clear, itemized invoices and transparent billing policies
• Require purchase order numbers and customer signatures
• Implement fraud detection tools and address verification
• Train customer service teams to resolve disputes early

Dispute resolution steps

1. Analyze the chargeback reason code and understand what documentation is required
2. Gather evidence that proves the legitimacy of the transaction
3. Dispute with a clear, factual rebuttal
4. Initiate the process promptly and with accurate information
5. Monitor the case closely

Final thoughts: Stay competitive with smarter payment strategies

In a challenging economy, industrial suppliers must be proactive about cost control. By optimizing payment acceptance, reducing fraud and integrating systems, you can protect your margins while delivering a better customer experience.

Want to learn more? Fill out the form on this page and a specialist will reach out to help you build a cost-effective B2B payments process tailored to your business.

*Certain state or local laws may restrict or limit the amount of the surcharge percentage. Although we offer surcharging in most states, merchants are responsible for determining the legality of surcharging in their states, and merchants are liable if their activities are found to be unlawful. Credit card surcharge applies to credit card only, not available on debit cards.