One supplier's card acceptance journey.

In the life of a card program manager, it is common to approach suppliers about accepting card payments. You initiate a call and are prepared to address the “why accept” question. What if a supplier surprises you by already being convinced? Instead of asking why, they want to know how. Smaller suppliers in particular might not know how to get started. Your ability to offer advice beyond “talk to your bank” could prove to be the pivotal action. For insider experience, I spoke with Rick Swartwood, CPCP, who went from card professional to restaurant entrepreneur (and card acceptor). Read on for his insights that could help you assist your suppliers.

Following his 16 years of Commercial Card experience—most of which were with the Lockheed Martin Corporation—and prominent industry participation, Rick pursued a lifelong ambition of opening his own restaurant in 2014. He is now seeking a return to the corporate world, whether working within a payments arena, procure-to-pay operation or shared services. His restaurant experience has given him a whole new perspective of what it means to be a card-accepting supplier. Email Rick or get in touch through LinkedIn.

Finding Merchant Services

While a supplier’s current bank is certainly one route to explore for merchant services, there are many other options. Finding them is probably the easiest part. Rick shared how, as a restaurant owner, approximately 20 different merchant services organizations “came out of the woodwork” to sell him on their card acceptance solution. If a supplier has not received any such communications, they could find options though a simple Internet search. Two popular search phrases are credit card processing and merchant services. However, in the business-to-business (B2B) payments world, it is critical to find an acquirer who specializes in this space.

Evaluating the Options

Like any vendor search, when selecting a merchant services partner, a supplier should be wary of any verbal promises by salespeople such as “no extra fees.” The written proposals always include various types of fees, such as: monthly service fees, add-on or pass-through fees, PCI compliance fees and contract opt-out charges.

Because each merchant services company had a unique proposal format, Rick’s biggest challenge was finding the fees within each proposal to make apples-to-apples comparisons. To make his process easier, Rick developed a standard list of questions and required each company to answer in the same order. Questions included:

  • Is your service based on a monthly statement processing fee or are the processing charges deducted on a batch by batch basis? 
  • Is your service based on a fixed rate per transaction? If so, does the rate vary by card type? 
  • Is your service based on a cost plus pass through charge? If so, what is the charge? Does it vary by card type?
  • When are the receipt funds available in my bank account? Does it vary by card type? 
  • Is there a single receipt for all card types or multiple individual receipts based on card type? 
  • Is there a cost to opt out of the contract? 

This approach could help other suppliers who are new to card acceptance. When a supplier specifically needs B2B credit card processing, I recommend they also ask merchant services companies about their B2B capabilities and experience.

Having Buyer’s Remorse

Rick’s original merchant services choice was not his last for a couple reasons. For example, the availability of funds for one type of card became problematic. While the funds were supposed to be available within 48 hours, the reality was that it sometimes took 72–96 hours. In addition, another merchant services company proposed some financing of restaurant equipment if they could become the processor, so it made sense for Rick to change. See also my previous blog post about why some card acceptance relationships fail.

Suppliers should not be afraid to make a switch, but they also need to consider the financial repercussions of doing so.

Suppliers who are new to card acceptance and seeking a merchant services partner need to be wary of any offers that sound too good to be true.

Suppliers who are new to card acceptance and seeking a merchant services partner need to be wary of any offers that sound too good to be true.

Final Thoughts

Every supplier has different needs when it comes to card acceptance. For Rick’s restaurant business, 85% of payments, including server tips, were via cards. For these reasons, his priorities were low fees and quick availability of funds. Because he was paying servers’ tips in cash on a daily basis, a two-day lag for card payments was not ideal. For a non-retail/non-restaurant business like mine, I sought simplicity above all else.  

The next time one of your suppliers seeks guidance concerning card acceptance, encourage them to:

  • identify their needs
  • understand the fees they could encounter and payment timing/availability of funds 
  • shop around for a merchant services provider, especially one with experience in business-to-business (B2B) credit card processing 

Access additional resources related to card acceptance.

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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