Accepting credit card payments for business-to-business (B2B) or business-to-government (B2G) is a great way for businesses to improve their cashflow and make their accounts receivable more efficient. Because the payment terms are being offered by the card’s issuing bank, the merchant accepting the payments doesn’t have to deal with net 30, net 60, or net 90 terms. The downside, however, is that commercial card transactions can be very expensive.
The card brands decided to use Enhanced Data (Level II and Level II processing) to lower the costs of interchange for B2B and B2G transactions, especially large-ticket items. Enhanced Data is additional information that you can submit with the transaction to notify the issuing bank that this is an authorized transaction for a specific good or service. Enhanced data fields include but are not limited to Order ID, PO Number, Order Description, Shipping, Tax, Commodities Codes, Shipping From Zip, Shipping To Zip and the like. When this information is submitted with the transaction, the likelihood of a chargeback due to fraud decreases tremendously. So, the card brands pass along interchange savings to the merchant running the transaction.
Our payment gateway allows us to input the data on the merchant’s behalf based on AI and machine learning. The merchant doesn’t have to do anything, just run the transactions like normal after they’ve opted into the program. It costs the merchant nothing out of pocket and you benefit from all of the savings.
Passing along enhanced data typically saves 0.20% to 0.50% in interchange fees, but it can be as much as 1.00% on large-ticket items. If you have B2B or B2G sales, you should definitely have some sort of platform to pass along enhanced data to save money.