The Importance Of Acceptance In The B2B Market

Think acceptance is only important in the B2C market? New research by MasterCard suggests you better think again.

A new white paper titled “Acceptance Matters – And Your Customers Agree” takes a deep dive into acceptance in the B2B world and produces some surprising results. For example, while you probably could’ve guessed that acceptance is a good thing, would you have predicted that a whopping 49 percent of buyers said they’d boost their purchasing volume if non-acceptors began taking card payments?

To learn more from the study, PYMNTS.com spoke to Rob Snyder, product leader, commercial products at MasterCard and the white paper’s author. Read what Snyder finds most interesting about the research, and how it builds on earlier work MasterCard has done in the B2B acceptance field, below.

PYMNTS.com: The study is interesting because I think most would assume that “Acceptance Matters,” but that many will be surprised by just how important it is. Is that a fair characterization of your overall findings?

Rob Snyder: Yes, I would agree with that. Business-to-business (B2B) suppliers in particular may be surprised by the study’s findings that point to the tangible, top-line revenue benefits that they can realize through card acceptance. After all, 49 percent of buyers indicated that they would increase purchasing volume if their current non-accepting suppliers began accepting cards.

Behavioral change is the name of the game in payments: explain how differences in acceptance can actually cause a purchaser chose one business over another.

It’s actually fairly straightforward. All things being equal, a purchaser prefers to use a card as a payment method because of its benefits relative to ACH and check—namely, the rebate they receive, potential rewards, reduced processing costs, better remittance data and increased security of the payment. The key factor is “all things being equal.” In some industries, a high concentration of a few suppliers will tend to limit the purchaser’s leverage in pushing the card option. In addition, they’ll need to be sure that the product and services that they’re receiving are on par with that of non-accepting suppliers.

What’s different about acceptance in the B2B market as compared to the B2C market? Are there any major difference?

There are several major differences. In the business-to-consumer (B2C) environment in the U.S., acceptance is nearly ubiquitous and consumers can typically use whichever payment method they prefer, while in the B2B world, there’s an existing system of in-house trade credit that companies have used for years. B2C merchants typically don’t carry accounts receivables where trade credit is an alternative. Finally, in B2B the perception amongst merchants is that card acceptance is cost-prohibitive because of the large transaction sizes. As a result of these factors, B2B acceptance is often selective, with suppliers limiting the option to the buyers that have the most leverage with them. Hopefully, this study and our previous study on cost-benefits will help make the case for broader acceptance.

We’ve talked about behavioral changes, but what about loyalty? How can acceptance encourage retention for suppliers among existing buyers?

Our study showed that 82 percent of buyers indicated an increase in satisfaction due to card acceptance. In addition to the “appreciation factor” for a given supplier that accepts card payments, a solid B2B card program often includes a rewards and/or platform that drives incremental value to the buyer.

What can suppliers do to advertise that they accept card payments? How do they get the word out to potential buyers?

Given that most buyers are eager to start using cards it shouldn’t take too much to get the word out. Most B2B suppliers have long-standing relationships with their buyers, which should streamline the communication effort. That said, at MasterCard we’re committed to playing a value-added role to help suppliers strategize and plan out reverse campaigns to make purchasers aware.

Finally, where do you see acceptance headed in the future? Will card acceptance continue to serve as a differentiator in the market?

With the findings of this study on the top-line benefits and our previous study’s findings on bottom-line benefits, I believe that acceptance will continue to be a differentiator. Clearly, its impact will vary to some degree by industry, company size, etc., but as long as we continue to educate all parties involved on the benefit of B2B acceptance it will continue to truly matter.