Business-to-Business Credit Card Volume Doubles in Two Years

November 5, 2014, Written By Lynn Oldshue
Businessman using his credit card

Business credit cards went through a very difficult period during the economic downturn. Issuers cut back on the approval rates of these cards, some getting out of the segment altogether. Many businesses stopped using the cards due to the high interest rates.

But now these cards seem to be making a comeback.

According to a new study from Hackett Group, the volume of business-to-business credit card transactions has doubled over the last two years. Approximately 10% of B2B purchases this year will be made through credit cards.

Credit cards offer better fraud protection for businesses than traditional check payments, and many provide cash back or mileage rewards.

Nevertheless, the fees involved with credit card processing is not ideal for business-to-business service providers. The interchange fees on these purchases can range from 2% to 4%, cutting out a significant portion of the profit for suppliers.

Small businesses in the print, construction, and media industries are companies most likely to prefer plastic over check payments, according to Veronica Wills, a Hackett Group director.

Despite the sharp increase in credit card transactions in the last two years, Willis told The Wall Street Journal that this trend may slow.

“There’s a little bit of saturation, and companies [that accept credit cards] are starting to get a little smarter about it too.”

New payment options, such as CurrentC, could put pressure on card processors to lower their fees, which may lead to a future increase in the usage of cards in business-to-business transactions.



The information contained within this article was accurate as of November 5, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.