Credit cards are being employed in more and more business-to-business (B2B) transactions. From the seller's point of view, that can mean a lot of money walking out the door in credit-card fees.
A recently released report from REL Consulting shows the use of credit cards in B2B has increased dramatically. According to REL, the information it gathers on large companies shows credit card use almost doubled between 2012 and 2013, to represent 9% of all B2B payments. REL estimates B2B sellers in the U.S. now incur an average of $2.2 million in credit card processing fees per $1 billion of revenue.
“It's almost a hidden cost that a lot of organizations haven't really noticed,” said Veronica Wills, a director at REL and leader of its customer-to-cash practice. “The reason it goes unnoticed [is] a lot of organizations look at the profit for a particular product or service as being the direct cost versus what they sell it for, and the direct cost isn't going to include the cost of the payment.”
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Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
