Payment Processing for the Business-to-Business and Business-to-Government Community

Business-to-business (B2B) commerce is a fast-growing segment of the global economy, ranging from high-volume sales involving enterprise-scale organizations to low-ticket orders for small and midsize businesses. Transactions between businesses that occur online are sometimes called e-biz and include all types of value exchanges between businesses.

When Accenture surveyed B2B executives in March 2015, researchers found 55 percent of respondents described digital forms of eCommerce as critically important to profitability. Additional analysis by eMarketer found most B2B companies in an early adoption phase of OmniChannel solutions designed to facilitate a seamless commerce experience for professional buyers, contractors and end-users.

As digital B2B commerce is expanding so does the need for electronic payment solutions. Accepting credit cards brings immediate savings to businesses through improved cash flow. Working with the right payment processing partnering will allow for next day funding, thus eliminating the cost of floating funds and collections.

About Business-to-Business (B2B) Commerce

How is Business Payment Processing Different from Consumer Payment Processing?

Credit card processing uses a three-level system referred to as Level 1, Level 2, and Level 3.

Level 1 credit cards, generally used in business-to-consumer commerce, require the least amount of data to be included within a transaction.

Level 2 credit cards are corporate cards, typically used for business expenses. Level 2 transactions can be processed without special requirements. However, card issuing companies have the option to set restrictions pertaining to spending limits and types of goods that can be purchased. Additional information may also be necessary for transactions to qualify for the lowest rate.

Level 3 cards, commonly known as purchase cards, are used by government agencies and large corporations. Level 3 transactions require more than twenty data elements be passed to qualify for the lowest processing rate.

Level 2 and Level 3 cards are downgraded (assessed additional fees) when required data elements are missing. To prevent downgrades, it is important to understand what is required for a transaction to process at the lowest rate. DigiPay provides business merchants with a payment gateway that seamlessly adds required data elements to prevent the transaction from being downgraded, thus reducing interchange rates for Level 2 and Level 3 transactions.

Businesses also need a payment gateway that will integrate electronic payment processing with their accounting or business systems. DigiPay, powered by TranZltyics, connects with widely used business management and accounting systems, including Microsoft Dynamics 365.

Most businesses use recurring payments and DigiPay provides a tokenized data vault to reduce the scope of PCI compliance. We provide the highest level of security by using hosted payment pages and advanced fraud protection. In addition to the most advanced fraud technology, DigiPay has an in-house risk management team to monitor transactions flagged for risk.

As we look to the near future, digital currencies will become increasingly important to B2B commerce. DigiPay powered by TranZlytics will transact in any currency, international or digital.

Want to Learn More?

DigiPay Solutions has created a “B2B Commerce Primer” with important information about setting up a merchant account, controlling chargebacks, managing risk and keeping merchant accounts in good standing.

Who is DigiPay Solutions?

DigiPay Solutions is a recognized payment processing brand among companies that provide products and services in the B2B market. The company’s extensive network of partner banks, payment experts and elite portfolio of tailored solutions has helped launch entrepreneurial start-ups and take enterprise organizations to the next level of corporate growth.

Thousands of merchants, from start-ups to enterprise-scale organizations, leverage DigiPay’s curated knowledge of payments to securely process hundreds of millions across an array of vertical industries. DigiPay works closely with B2B partners, providing tailored solutions and timely advice to national and regional service providers, and helping them maintain the highest standards of banking and payment card industry compliance.

DigiPay’s team of experts, combined with our partners’ proven record of successful B2B services, can help start-ups to successfully launch and existing businesses to grow and scale.

Business to Business Payment Processing Primer

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A Brief Guide to the B2B Market

The B2B Market: An Economic Overview

B2B ecommerce market is growing as businesses recognize the value of improved cash flow and the option to accept digital currencies. Forrester Research predicted in June 2015 that U.S. B2B ecommerce would comprise 9.9 percent of B2B commerce, to reach $855 billion by 2016. Additional 2015 studies by Frost & Sullivan and Accenture/Blackstone Group forecasted $1.1 trillion in U.S. ecommerce and 6.7 trillion in global B2B ecommerce by 2020. The Accenture/Blackstone Group survey found that ecommerce accounts for only 10 percent of total B2B commerce, but financial analysts expect to see more growth as companies update legacy online portals and move to online forms of accounts payables and receivables.

B2B ecommerce growth is outpacing B2C commerce by 2-to-1, according to recent studies by Forrester Research. While forecasts vary, most research analysts agree that growth in the sector is being driven by the expanding internet marketplace and a global migration by business owners to online forms of accounting, procurement and logistics.

Additional research finds B2B companies are influenced by B2C trends, such as omnichannel marketing, mobile apps and multiple fulfillment options. Businesses are implementing digital technologies to drive key performance indicators and keep pace with competitors, borrowing strategies from the consumer retail playbook to attract and retain buyers, studies have shown.

Born-in-the-cloud service providers generally outpace established firms that are burdened with legacy infrastructure, notes Louis Columbus, Director, Cloud Product Management at Ingram Cloud. “Instead of requiring intensive levels of customization, these cloud platforms are configurable, support multi-tenancy and can scale to support innovative new business models including CPQ and pricing,” he wrote in Forbes. “Born-in-the-cloud e-commerce platforms also support more complex selling workflows including order orchestration, fulfillment through multiple channels and the ability to manage multiple fulfillment systems concurrently.”


B2B consultants and service providers are categorized by SIC Code, NAICS Code and Visa Merchant Category Code (MCC) to comply with payment card industry requirements.
Proper classification is vitally important to prevent funds from being held in reserve for misrepresentation. Of note, B2B commerce can be classified under different general industry codes, depending on the nature and focus of services. Following are several general codes:

SIC Code 7380: Misc. Business Services

NAICS Code 42: Wholesale Trade

MCC Code 9950: Business-to-Business, Intra-Company.

Additional information on Visa MCC can be found in this downloadable guide.

Leaders and Rising Stars

B2B businesses range from independent specialists to enterprise-scale organizations, providing abundant choices of providers and programs focused on B2B products and services. Here are some leading companies in the space:

  1. Apttus:

    Apttus is a cloud-based enterprise software provider that offers a range of Quote-to-Cash (QTC) solutions designed for ecommerce and revenue management. The company uses advanced analytics, machine learning and automation to drive efficiencies in data input, reporting and CRM systems. Apttus Intelligent Cloud runs leading CRM platforms, including and Microsoft Azure. The company is based in San Mateo, California, with 9 offices worldwide including Chicago, Montana, London, India, Japan and Australia.

  2. CloudCraze:

    CloudCraze is an enterprise software platform that leverages cloud-based technologies to improve efficiencies and provide commerce solutions for global brands, including Coca-Cola, GE, Adidas and Kellogg’s. The company’s partner network includes global consultancies and regional commerce implementation experts.

  3. International Business Machines Corp. (IBM Corp.):

    IBM, established in 1911, is a global technology company headquartered in Armonk, N.Y. The company’s numerous divisions manage consulting and business services, including cloud-based information technology solutions designed to help organizations improve business processes and profitability.

  4. Microsoft Corp.:

    Microsoft Corp., established in 1975 and headquartered in Redmond, Wash., is a leading technology platform and productivity company focused on the mobile-first, cloud-first world. The company’s B2B and B2C divisions operate throughout the world; its mission is to empower people and companies to use technology to achieve their full potential.

  5. Your Name Here:

    With your great brand story and DigiPay Solutions as your processing partner, there’s no limit to how far you can scale your company. DigiPay’s diverse, extended family of B2B professionals process anywhere from $20,000 to millions in monthly revenue.

Interested in learning more about Publicly Traded B2B Companies listed on Major U.S. Exchanges?

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B2B Programs and Services

Any type of commercial transactions that occurs between business owners is a business-to-business or B2B activity. Business-to-business and business-to-consumer categories are not always mutually exclusive. Companies that operate on multiple tiers have wholesale divisions that may sell inventory in bulk to businesses and retail divisions that sell individual items to consumers. These transactions may include office supplies, furniture, and various consulting services.

B2B transactions are different than transactions involving consumers and government entities, and may include the following characteristics:

Higher volumes: B2B transactions typically have higher dollar values and inventory volumes than those that take place at consumer and retail levels. These higher volumes require a banking relationship that understands B2B.

Integrated business management systems: It is critically important for enterprise organizations to link transactional data across accounting, inventory, customer databases and front and back office systems. Finding a processing partner who can provide the integrations to your business management systems is vitally important. DigiPay powered by Tranzltyics offers integrations and support to the most widely used accounting and ERP systems.

Opportunities and Challenges

B2B commerce is rapidly expanding; Gartner predicts that 70 percent of all online transactions will be B2B by 2018. Cloud-based B2B ecommerce platforms are facilitating a range of ancillary services beyond procurement and fulfillment, enabling corporate clients to introduce incentives, promotions and rebates designed to enrich their business customers’ experience.


Single-access to multiple channels: Many business owners are searching for eCommerce platforms that support complex pricing schemes and workflows across global distribution channels. These systems enable them to manage multiple networks from a single access point.

Digital outperforms legacy: When it comes to order management, digital platforms have been shown to outperform silos. Traditional companies that try to update legacy systems generally have more difficulty than newer “born-in-the-cloud” companies that have no baggage, and are free to design smarter, digital order management systems.

Just-in-Time (JIT) availability: Companies are implementing lean manufacturing practices to compete in the global marketplace. There is a growing need for advanced order management systems that use automation and artificial intelligence to facilitate partial deliveries and replenishment, multiple-warehouse shipments, exchanges, returns and other complex forms of fulfillment.

Pricing optimization: The global business community depends on dynamic pricing models to serve multiple channels. Configure-Price-Quote (CPQ) software solutions enable organizations to update prices in real time. These sales tools automate business rules for products and pricing.


Lack of Integration: Today’s business enterprises rely on integrated business management systems that seamlessly connect data points across multiple locations, geographies and channels. Established organizations are tasked with enhancing or replacing proprietary, standalone systems that are difficult to update or integrate, to remain relevant and competitive. Working with a payment partner that specializes in B2B offers:

  • Expert knowledge of complex integrations
  • Access to a wide range of business management system
  • Level 2 and Level 3 credit card processing at the lowest rate

Security: EMV for card present transactions has hindered cyber criminals ability to transact with stolen or manufactured cards. As a result they have gone digital. Businesses of every size are targets. Working with a processing partner with knowledge of card not present security is the best way to protect your business and your customers data.


Enabling B2B Commerce

How do I create an eCommerce Merchant Account?

Establishing a merchant account to process payments is the first step in enabling commerce. DigiPay’s expanded network of banking relationships accepts the B2B business category and provides competitive rates, terms and conditions.

B2B commerce providers find it advantageous to process payments with knowledgeable partners who are familiar with corporate business practices. Payment processing sales representatives who mostly work in the B2C space may not be familiar with business protocols, bidding processes and purchase order guidelines commonly associated with business-to-business commerce. Their learning curves may compromise their ability to manage relationships. B2B processing partners can save time and money by preventing transactions from being downgraded, improving efficiencies, and allowing customers to take advantage of the rewards that come with using their business credit card.

Can DigiPay Acquire B2B Merchant Accounts?

Yes, as a B2B service provider, B2B commerce is part of DigiPay’s business identity and brand. Our financial services specialists are knowledgeable about B2B commerce and its diversified categories, requirements, SIC, NAIC and VISA MCC codes. We underwrite our merchants before sending their applications to our sponsor bank.

DigiPay’s corporate B2B clientele receive personalized attention and ongoing risk management from DigiPay’s team of payment specialists and banking partners. Personalized service, coupled with the sheer volume of transactions we process through multiple banks, ensures the highest level of service and support for our merchants.

Choosing the right payment processing partner is critical, because business owners need payment acceptance solutions that are tailored to their businesses. DigiPay’s merchant onboarding process combines sophisticated technology with human oversight. Experienced underwriters who understand the B2B space, and have expertise in payment card brand and banking industry compliance, bring a refreshingly holistic approach to new account set-ups.

B2B commerce is growing exponentially and DigiPay can help accelerate that growth, with B2B resources and customized processing solutions. Together with our partners, DigiPay Solutions seamlessly integrates processing technologies into core business management frameworks.

What is the process for opening a B2B merchant account?

B2B commerce is considered a low-risk category, which helps expedite the account onboarding process. DigiPay is unique because we underwrite merchants in-house before we submit their applications to the bank. Our experienced underwriters review and prepare all documents and disclosures before submitting the application to the bank, to fast-track account activation.

Merchant accounts are essentially a line of credit from a processor, and subject to periodic review. Chargeback ratios, regulatory and security compliance and adherence to payment card brand guidelines are critically important to maintain a processing account. Complaints to the FDA or FTC against a merchant create liability for merchants and their processors under Know Your Customer (KYC) regulations.

DigiPay’s in-house team of underwriters and risk managers have curated knowledge in all areas risk management. We are best qualified to streamline the application-to-activation process.

How do I increase my processing limits?

Once a B2B merchant account is approved, payment processors set monthly processing limits, based on business type and previous history, to mitigate risk. This enables processors to assess transaction flows, average ticket sizes, processing levels and chargeback ratios and develop a customer risk profile.

B2B merchants usually increase their processing limits after successfully navigating initial trial periods. DigiPay’s risk management team works with merchants and sponsoring banks to shorten trial periods and raise processing limits.

Managing Alerts, Refunds and Chargebacks

DigiPay’s Chargeback Champions:

Chargebacks can be an emotionally charged issue for many merchants, but with the right systems in place, managing and defending against them can be a routine part of any merchant’s business. DigiPay Solutions’ team of Chargeback Champions works with business partners to identify the root causes of chargebacks, proactively avoid them whenever possible and effectively address each chargeback and retrieval request.

DigiPay’s elite team of Chargeback Champions treats each chargeback request with an open mind and ample resources. Maintaining a low chargeback ratio is key to maintaining a healthy merchant account. When chargebacks exceed card brand maximums, your merchant account is at risk of being shut down. If a merchant category has consistently excessive chargebacks, banks will sometimes shut down an entire vertical industry. For this reason, it is critical for high risk verticals to self-regulate and work collaboratively to establish industry best practices.

How can I track my chargeback and refund ratios?

Keeping track of your Transaction Chargeback Ratio as well as your Volume Chargeback Ratio is critical because this is what Visa, Mastercard and payment processors monitor. Payment processors with high chargeback ratios in their merchant portfolios can trigger unannounced audits by Visa or Mastercard. For this reason, DigiPay, powered by TranZlytics, closely monitors chargeback and refund ratios, reacting quickly to spikes in activity. Excessive refunds, fraud alerts and chargebacks, can be a sign of fraud or substandard business practices, information card brands and banks may consider when assessing risk.

The formulas shown below use simple math to derive Transaction Chargeback, Volume Chargeback and Refund Ratios:

  1. Transaction Chargeback Ratio:

    Add total monthly number of chargebacks and divide by total monthly number of transaction. For example – if during a month you processed 500 sales, and there were 10 chargebacks, your chargeback ratio would equal 10/500, or 2.00%.

  2. Volume Chargeback Ratio:

    Add total monthly dollar amount of all chargebacks and divide by the total monthly sales volume.
    For example – if during a month, you processed 500k in sales, and your chargebacks were 10k, your chargeback ratio would equal 10/500, or 2.00%.

  3. Transaction Refund Ratio:

    Add total monthly number of refunds and divide by total monthly number of transactions.
    For example – if during a month you processed 500 sales, and there were 10 refunds, your refund ratio would equal 10/500, or 2.00%.

  4. Volume Refund Ratio:

    Add total monthly dollar amount of all refunds and divide by the total monthly sales volume.
    For example – if during a month, you processed 500k in sales, and your refunds were 10k, your refund ratio would equal 10/500, or 2.00%.

How do I maintain low chargeback and refund ratios?

It is important not to ignore chargebacks, because win/loss ratios matter. Visa and Mastercard can impose penalties and fines in the tens of thousands on payment processors and their sponsoring banks for continuing to process transactions for merchants that exceed the permissible 2 percent chargeback ratio. Non-compliant processors and banks may also be subjected to further scrutiny and potential shut-down by card brands and regulators.

Here are some recommended ways to maintain low chargeback and refund volume ratios:

  • Stop fraud before it happens:

    Proactively identify fraudulent and stolen cards and suspicious behavior when possible. Having items like an SSL certificate, additional billing details, and other fraud detection tools.

  • Be accessible to customers:

    Dissatisfied customers with access to live support generally appreciate the opportunity to air their grievances. They may be satisfied with a simple return or refund and find it unnecessary or initiate a dispute or chargeback.

  • Maintain a high transaction count:

    Companies with high levels of credit card transactions are in a better position to absorb chargebacks. Low-volume merchants may find themselves in the dubious position of having a high chargeback ratio, even with a low chargeback count.

  • Maintain excellent logistics and fulfillment:

    In the always-on, always-connected world, corporate customers expect immediate confirmations and emailed receipts. A good CRM program can automate this process. The DigiPay TranZlytics Gateway is preconfigured to display merchant contact information and a customer service number.

  • Use email marketing:

    Follow up with a simple survey or thank you email. This simple gesture will improve brand recognition on billing statements and make it easy for clients with complaints and inquiries to contact your company.

  • Initiate pre-chargeback and refund alerts:

    Create instant notifications of incoming requests for refunds, chargebacks and assorted customer inquiries. These services can be implemented in-house or outsourced to third-party providers. Merchants have a small window to react to inquiries and disputes before card brands rule in customers’ favor. Automated chargeback and refund alert systems help to mitigate this risk.

  • Implement a billing support hotline:

    Providing customers with a dedicated, toll-free number and email address will alleviate their concerns and build good will. B2B businesses that are responsive to customer inquiries have been shown to decrease chargeback and refund ratios.

  • Create an easy refund process:

    Refunds are a reality of life and a cost of doing business in the B2B industry. By accounting and budgeting for refunds, B2B merchants can accommodate dissatisfied customers, avoid chargebacks and improve transaction flows.

Chargeback Mitigation Companies for B2B Businesses

Merchants can handle chargebacks in-house or outsource to a Chargeback Mitigation Specialist. The following companies are experienced in identifying all forms of fraud, including friendly fraud. They will investigate chargeback claims and retrieval requests on behalf of merchants:

Chargeback Mitigation Companies:

  • MIDigator* – DigiPay Preferred Provider
  • Chargeback Guru* – DigiPay Preferred Provider
  • Chargebacks 911
  • Chargeback 360


Choosing a Payment Gateway

How do I choose an eCommerce Payment Gateway?

Many B2B merchants rely on eCommerce and Mail Order/Telephone Order (MOTO) sales to scale their businesses. Credit card payments transacted online or by phone are called Card Not Present (CNP) transactions. Online CNP transactions involve credit card gateways that transmit payments from merchants to their payment processors.

Following is a list of recommended attributes of payment gateways that address the unique requirements of the B2B industry:

Support multiple merchant account IDs (MIDs):

Many B2B companies need multiple merchant accounts to support their diversified array of B2B product and service offerings. Gateways should ideally be able to manage multiple merchant I.D.s organized under one master MID relationship.

Simple integration:

Payment gateways need to seamlessly integrate into CRMs, POS systems, third-party software, and eCommerce shopping carts to facilitate all forms of online, MOTO and in-store commerce.

Enhanced reporting tools:

B2B professionals rely on a variety of real-time reports and transaction data to grow and scale their businesses and manage chargebacks and refunds.

Merchant Dashboard, with permission levels:

In addition to enhanced reporting, B2B merchants need to securely access transaction data from anywhere they happen to be working, with built-in permission levels that facilitate all levels of employees and management.

Payment gateways must comply with the Payment Card Industry Data Security Standard (PCI DSS). Ask your gateway provider if they are PCI DSS compliant and verify their certificate annually. B2B merchants also need a gateway with a data vault for tokenization of credit card numbers and encryption of customer personally identifiable information (PII).

Tokenization replaces a Primary Account Number (PAN) with a randomly generated set of numbers and records this in the data vault. This is to prevent hackers from accessing customer data. By storing PII and PAN in a highly secure, offsite location merchants shift their liability to the gateway provider. Encryption and tokenization keep your customer’s information safe while allowing merchants access to the data for future transactions.

TranZlytics Gateway:
TranZlytics offers B2B merchants a Gateway and HUB built from the ground up for B2B with integrations to the most widely used accounting and ERP systems.

TranZlytics also offers advanced real-time reporting for faster and better use of CRM data.
Payment descriptors are registered with a Chargeback Alerts program; re-presentments are pre-integrated with the gateway.

With a single HUB for transaction management and an expert risk management team to monitor your data, you can focus on what you do best, growing your business. Think of Tranzlytics as a B2B Commerce HUB with the IQ of Einstein and the memory of an elephant.

CRMs for B2B Businesses

Customer Relations Management (CRM) software is a basic requirement, both for large enterprises and small companies that want to scale and grow their businesses. These systems are designed to automate the lifecycle of product offerings and to facilitate payments. As with payment gateways, it is vitally important to validate the CRM is PCI DSS compliant if it is touching customer information. Unlike payment gateways, CRMs are not rigorously monitored for PCI DSS compliance; a security breach can devastate your business and erode customer trust.

Below are examples of CRMs used by B2B entrepreneurs, small and midsize businesses and enterprise-level organizations:

  • Zoho CRM:

    Zoho, a generic and inexpensive CRM program provides tools for recurring billing, customer tracking, customer satisfaction emails and a customizable database. While the service is not specifically designed for the B2B industry, it is affordable and supports multiple MIDs.

  • Google Sheets:

    Google Sheets is a free service that provides a basic spreadsheet for start-ups. Its biggest asset is that it is free.

Growing and Scaling Your B2B Business

It’s a Great Time to be in B2B

B2B commerce is a highly competitive and rapidly expanding market, and DigiPay is excited to be part of it. Our extended family of B2B service provider merchants, with vastly different models and product sets, are equally committed to optimal results, performance metrics and profitability. All want efficient, compliant processing systems, which is our specialty.

Mike Ackerman
Co-Founder, CEO, DigiPay Solutions

Industry Associations

The following membership organizations and trade associations represent the interests of the B2B industry:

The Business Marketing Association (BMA): The BMA is a professional association in the United States for B2B marketers and communicators.

The Direct Marketing Association (DMA): is a global trade association for business and nonprofit organizations that use and support multichannel direct marketing tools and techniques.

Annual Events and Conferences

Annual conferences and events provide B2B professionals with networking and educational opportunities. Here are some examples:

May 2017: B2BOnline: B2BOnline is an annual conference for manufacturers and distributors that market products and services online in the B2B community. The 2017 event, held in Chicago, Ill., featured speakers from leading brands who presented on digital strategies and success.

Sept. 17-19, 2017: B2B Connect: B2B Connect is a forum for Digital, Marketing and eCommerce executives from U.S. manufacturers and distributors, designed to provide B2B executives with networking and meetings with solution providers in a high-profile, niche gathering. Attendance is limited to 75 top executives from distribution and manufacturing industries.

Feb. 19-21, 2018: B2B Marketing Exchange: This conference, for performance marketers who manage sales cycles and group buying for B2B industries, addresses topics that matter most to B2B—Account Strategies, Messaging Frameworks, Demand Acceleration and Sales Enablement, providing attendees with actionable insights they can apply to their business to drive engagement and revenue.

Join the growing community of B2B companies that process with DigiPay Solutions

Thank you for taking the time to review this compendium to learn about available opportunities and solutions for B2B professionals and organizations. We look forward to welcoming you to our growing merchant community.

Our streamlined application process takes minutes to complete. Once approved, our relationship managers will help you personalize your business management portal and leverage our full complement of secure payment gateway and chargeback management tools. They’ll help provision your processing account, ecommerce website and ancillary services.

DigiPay will make it easy for customers to find you, by helping you create an engaging online presence and seamless customer experience. Take your B2B business to the next level today at

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