ACPA Quarter 2 2019

Concrete Pavement Progress www.acpa.org 24 IN THE CONCRETE INDUSTRY, credit card process- ing looks much different than the typical retail model. Transactions are often entangled with invoices, mail and telephone (MOTO) orders, and business and government cards. It’s also likely that your business has little to no contact with direct consumers. As a business owner ormanager, you are probably well acquainted with large, sporadic payments and high processing fees. Fortunately, if your organization sells almost exclusively to other businesses, or if you have a small number of high-ticket, business-to-business and business- to-government (B2B and B2G) transactions, you might be able to lower your costs with a virtual terminal. What is a virtual terminal? A virtual terminal is a website that allows you to process credit and debit transactions online. No new equipment is required. Virtual terminals usually have a full suite of complimentary features, including customizable reporting, PCI-compliant* data storage, and the option to set up recurring billing and scheduled payments, all from your personal computer. However, the most important function of a vir- tual terminal is its ability to lower your rates on B2B and B2G credit card transactions. Why are B2B/B2G Transactions more expensive? The credit card associations (Visa, MasterCard, etc.) charge a set interchange fee on every trans- action. This amount is used to pay the card- issuing bank and varies depending on what type of card is used. On B2B and B2G transactions, interchange makes up the majority of your pro- cessing fees. Interchange fees are usually higher on business and government cards for two reasons: 1. Purchasing cards frequently offer cash re- bates and rewards programs—Credit card companies employ a variety of perks and benefits to entice new customers to these programs. For example, Capital One’s Spark card lets businesses earn 2% cash back on all purchases. Offering these perks isn’t cheap, so higher interchange is charged to offset the costs. 2. Card-not-present transactions are consid- ered higher risk—If a customer is not physi- cally presenting their card, the transaction is perceived to be higher risk, resulting in higher rates as well. Coincidentally, most B2B/B2G transactions take place online or over the phone. How can you lower your rates? Minimizing costs is a priority for every business, but if you’re busy visiting job sites, managing labor and inventory, and securing new work, you likely do not have a lot of time to negotiate lower pricing on processing. Fortunately, there are processing solutions that will both save you money and increase the ef- ficiency of your business. The easiest and most effective way to lower your rates is to utilize a vir- tual terminal designed specifically for B2B/B2G businesses. These terminals are able to qualify for Level II and Level III rates, which are only available for transactions using business and government cards. To qualify for Level II and Level III rates, you’ll need to submit extra data with each of your transactions. Unfortunately, the required infor- mation can vary from just the zip code to industry codes, complicated product descriptions, and The Concrete Industry Guide to Processing with a Vir tual Terminal V I R T U A L T E R M I N A L S