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While the B2B and B2C ecommerce experiences may feel similar on the front end, it's on the back end where big differences can be found. For example, business and consumer ecommerce sales each require their own unique sets of payment policies. Trying to serve both types of buyers under a single set of policies can cause unintended consequences. Understanding the difference between the two will allow merchants to optimize their payment acceptance procedures.
There are several ways that business and consumer payments differ. Recognizing these and putting appropriate payment policies in place will reduce processing expenses and fraud losses.
• Order frequency: While there are certainly exceptions depending on the industry of the merchant, B2B ecommerce orders typically repeat and may be placed with a higher frequency. Also it is not uncommon for B2B merchants to have numerous transactions within the same day from different departments at large organizations, which may use different card numbers all issued from the same bank. In a B2C payment transaction environment, frequent multiple orders that present different card numbers from the same bank are huge red flags that should be setting off fraud alerts preventing these orders from being fulfilled. Therefore, accounting for these differences in the implementation of your payment polices will be important to allow you to safely accept orders while preventing fraud.
• Order size: Procurement specialists rarely buy one item, unless it's a big-ticket item. Typically, an order will be processed for an entire department, facility or organization. Office supplies, for example, are purchased in bulk to satisfy the needs of many, not just one individual. On the flip side, first-time, large quantity consumer orders requesting overnight delivery placed using a free email account should set off fraud alerts within your ecommerce solution. So if you sell to both B2B and B2C, segmenting your payment acceptance procedures will be key to your success.
• Disputes: Preventing card payment chargebacks starts with your KYC (know your customer) policies. Additional purchase terms will stem from not only on the type of customer (business or consumer) you serve but on how well you know your customer. For example, payment policies covering how returns are handled (from "all sales final" to restocking fees) vary by industry norms and by merchant preferences. However, the way your policies are presented and notification acknowledgement recorded can impact card payment dispute resolution.
• Transaction data submitted: Commercial card transactions require more information about what was sold, including invoice-level data like commodity code, description, product code, quantity, unit of measure, unit cost, tax rates, tax amounts and more. While this information is unnecessary for consumer card payments, providing this extra data for your B2B commercial and government transactions will greatly reduce your Interchange expenses.
These are just a few examples of the many things to be aware of when conducting ecommerce sales with both consumer and commercial buyers. Contacting a B2B payment solutions provider like Vantage B2B can help merchants develop best practice policies and implement a suite of business payment services to lower cost, increase productivity and enhance security.
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