How to Avoid B2B Credit Card Fees and Improve Profitability

Table of Contents

1. Common Types of Credit Card Fees
2. Why B2B Credit Card Fees Are Higher
3. Strategies to Minimize B2B Credit Card Fees
4. Alternative Payment Methods to Reduce Fees
5. The Hidden Costs: Interest, Due Dates & APR
6. Streamline Your Payments with Paystand

Key Takeaways

• B2B credit card fees include interchange, gateway, and processing fees that can eat into profits.
• These fees are typically higher than B2C due to larger transactions and increased risk.
• Strategies like negotiation, incentives for lower-cost methods, and automation can reduce reliance on costly cards.
• Platforms like Paystand and payment types like EFTs provide smarter, more cost-efficient ways to get paid.
• Reducing credit card use can boost cash flow, eliminate unnecessary fees, and improve financial transparency.

Since beginning to accept credit cards, businesses of all sizes have been plagued by credit card fees. While bigger businesses with higher credit card transaction volumes can negotiate better terms and fees, they still pay a significant portion of their revenue, and small businesses without that negotiating power are left to pay even higher percentages to the credit card cartels, think Visa and Mastercard. In this blog, understand how credit card fees are really impacting your business and what you can do to alleviate a chunk of those fees.

Common Types of Credit Card Fees

When B2B companies accept credit card payments, they encounter multiple types of fees—each chipping away at their margins:

• Interchange Fees: Set by card networks (e.g., Visa, Mastercard) and paid to the issuing bank. These typically represent the largest slice of the cost.
• Processing Fees: Charged by the payment processor, these are usually a fixed amount plus a percentage of the sale.
• Gateway Fees: Common in online transactions, these cover the cost of the payment gateway used to securely process the transaction.
• Monthly/Annual Fees: Some processors charge a flat service fee—regardless of usage.
• Balance Transfer Fees & Cash Advance Fees: Though less common in B2B, these add extra costs if used.
• Foreign Transaction Fees: If dealing with international clients, businesses may be hit with 1–3% per transaction unless using a credit card with no foreign transaction fees.

Over time, these expenses add up—especially when you're processing large invoices or recurring payments.

Why B2B Credit Card Fees Are Higher

B2B transactions typically charge higher fees than B2C for several reasons:

• Larger average transaction sizes mean higher risk for banks and networks.
• B2B credit card transactions often require Level 2 or Level 3 data (like purchase order numbers), which adds complexity and cost.
• Corporate cards used in B2B payments have higher annual percentage rates (APRs) and interchange rates due to their reward structures.
• Unlike consumer businesses, many B2B sellers don’t pass on fees via surcharges or convenience fees due to client relationship concerns.

Strategies to Minimize B2B Credit Card Fees

Here are some tactics that can significantly reduce your credit card expenses:

1. Negotiate With Your Processor

High-volume merchants often have the leverage to reduce processing fees. Ask for customized pricing models or flat-rate options instead of default interchange-plus structures.

2. Implement Convenience Fees or Discounting

Offer small discounts for payments made via EFT or ACH. Or, apply a convenience fee to card transactions to recoup some fees.

3. Automate & Optimize With Paystand

Platforms like Paystand automate AR workflows, match payments automatically, and route transactions through zero-fee networks, reducing reliance on expensive credit rails.

4. Use Payment Controls

Set due dates to encourage early payment, and steer customers toward preferred methods at checkout. Combine this with payment terms and logic that make costly card use less attractive.

Alternative Payment Methods to Reduce Fees

Many companies are shifting away from cards to more efficient payment methods:

EFT (Electronic Funds Transfer)

Lower-cost and faster than checks, EFT allows for direct bank-to-bank payments with no gateway or interchange fees.

ACH Payments

Ideal for recurring transactions or U.S. subsidiaries, ACH is secure and cost-effective for invoice settlements. Businesses can pay their balance without incurring the steep fees tied to card use.

The Paystand B2B Network

Eliminate credit card fees entirely with Paystand’s zero-fee payment network. You can also leverage Smart Match AI for reconciliation and reward your customers for using fee-free rails.

The Hidden Costs: Interest, Due Dates & APR

Even when businesses pay their balance on time, credit card use carries indirect risks:

• Interest Rates: Corporate cards often come with high APRs, and missing a payment due date can lead to significant finance charges.
• Impact on Credit Score: High utilization on business cards can affect your company’s credit score, potentially increasing borrowing costs.
• Rewards Cards Aren’t Free: While rewards cards may seem attractive, their benefits are offset by higher interchange fees—costs that vendors end up absorbing.

These hidden costs further prove that cards, especially in B2B contexts, often do more harm than good.

Streamline Your Payments with Paystand

If you're still relying on traditional card-based payments, you're leaving money on the table. Paystand helps you eliminate fees, automate cash application, and gain real-time visibility into every transaction.

• Flat, predictable pricing
• EFT, ACH, and zero-fee B2B network support
• Full automation of payment workflows
• Real-time dashboards and ERP integration
• No more cash advance fees or foreign transaction fee surprises

Ready to stop letting credit card fees chip away at your revenue?

Explore how Paystand helps businesses ditch fees and get paid faster.