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Merchants who sell their goods to government organizations will often encounter buyers who wish to pay with government charge cards. Some may be wondering if they have to accept these kinds of payments, as they can often carry higher processing fees. Ultimately, it's the cost of doing business with such customers.
According to the GSA Smartpay website, "Merchants and vendors that wish to obtain a schedule contract to do business with the government are required to accept the government charge card as a method of payment for micro-purchases, generally those purchases under $3,000."
Essentially, if a vendor wants to work with a procurement specialist at a government agency, the merchant will have to accept their payment method. While some may feel that the best option is to simply remove the government from their market, that might not be a wise decision. Typically, government contracts are a reliable source of revenue, recent events notwithstanding. Eliminating that portion of a customer base could have a large impact on business revenue. Moreover, purchasing cards used in the private sector carry similarly high fees, so moving away from B2G sales won't necessarily resolve the problem.
Ultimately, vendors that wish to continue selling to government agencies can reduce the stress of high processing fees by obtaining payment solutions designed to process Level 3 data, which will help secure the lowest possible interchange rate. Moreover, as this blog recently reported, processing Level 3 data will soon be required.
Vendors may have to accept government cards if they want to sell to public organizations, but working with a payment solutions specialist will allow them to do so without putting additional stress on their business.
Complete our contact form and we'll send you a link to download our Quick Reference Guides covering the essentials of accepting purchasing cards including best practices, Interchange rates & fees and card data security.