Merchants and or suppliers to sell to the government or businesses can significantly add hundreds even thousands to their bottom line revenues from gaining and understanding of how purchase cards P-cards differ from your standard commercial and consumer transactions.
Accepting purchase cards from your clients is one of the only times your rate is not solely determined by your processor.
Purchase cards have tiered rates which vary by more than 1% based on information that comes from you, NOT your processor.
This was to encourage merchant support and participation of the Purchase card programs by creating special incentive rates. It will require you update your technology, but will result in a 30%-40% reduction if your fees.
You will also need a pricing model which shows the true interchange cost, (often called Pass Thru or Interchange Plus
If you have a tiered rate, these transactions will automatically downgrade to Non qualified.
With plus you will pay one of several rates based on any additional information you send with the transaction. This can vary from 1.80%-2.95%
Most suppliers process these transactions like any other standard commercial card, not realizing there is a difference and that by doing this they are giving up 30% more in potential bottom line revenues. There are not GSA Level-3 Mandates yet, but Level 3 is a requirement for some contracts recently awarded and Level 3 is in demand from federal buyers.
If you have any questions give me a call. I will be happy to provide resources to validate this information.
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