The next VDTA/SDTA Convention & Show will be in
New Orleans, LA
February 27 - 29, 2012
at the Ernest Morial Convention Center

Member Benefits

Accepting commercial credit cards
Eliminate paperwork & lower costs by accepting commercial credit cards

Across the country, businesses are looking for ways to eliminate paperwork and lower costs and they are finding that this type of card is the answer. Commercial credit cards look like ordinary Visa® or MasterCard® credit cards but are governed by a different set of regulations. Depending on the type, commercial cards require additional entries into your credit card terminal or point of sale software at the time of sale beyond what is requested for a consumer card purchase. For example, when processing a purchasing card transaction you should be prompted for sales tax and customer code. Only when all requirements are met at the time of purchase do you achieve the lowest possible interchange rate.

What are commercial credit cards?
Commercial cards, also known as purchasing cards, business cards or corporate cards, are essentially a form of payment for companies that do business with other companies.

Are you paying more for accepting commercial credit cards?
Check your monthly statements -- are you getting downgrades on commercial card transactions (i.e. non-qualified rates.) If you are not currently set up to properly process commercial card transactions, you may be paying more than necessary.

Requirements for accepting commercial cards.
As part of the requirement for accepting commercial cards, Visa and MasterCard require additional electronic data be sent as part of the transaction for these cards to remain eligible for their lowest interchange rates. The additional data requirements are as follows:

• Corporate & Business Cards Sales Tax Amount must be between 0.1-22% of the sales amount.
• Purchasing Cards Sales Tax Amount & Customer Accounting Code*

If the additional data requirements are not provided as part of the transaction, it will become a non-qualified transaction and will be surcharged appropriately based on your current pricing structure.

Notes:

1. When you enter the tax in the Tax Amount field, it does NOT add to the total amount. This field is for reporting purposes only and will show the cardholder on their statement exactly how much tax they paid on the transaction.
2. Effective April 2006, Visa eliminated tax-exempt transactions from Commercial Card Level II Data Rate. Transactions with a tax amount of $0.00 will qualify for either Commercial Electronic or Standard.

To avoid a downgrade, the tax amount must be 0.1%-22% of the transaction amount.

*The cardholder provides the customer accounting code. It can be up to 17-digits and is a unique number to identify that cardholder in the company (usually and employee #, general ledger # or accounting #). If the customer accounting code cannot be obtained, enter “1111.”

Smart businesses accept commercial cards:

1. To enhance customer relationships and win new business. Corporate customers appreciate suppliers that understand the advantage of conducting business electronically.
2. To improve cash flow and reduce carrying costs. When your business accepts commercial cards, your business receives prompt, fast payments in days instead of weeks or months.
3. To simplify the purchasing of goods and services. Commercial card users have pre-approved spending authorization, so transactions can be quickly approved at the point-of-purchase.
4. To eliminate the complex invoicing and collection procedures. You will no longer need to perform time consuming invoice preparation or spend time and money tracking down late payments.
5. To avoid credit risks and abuses of purchasing authority. Commercial card users are pre-screened for credit approval. Purchasing authority is verified automatically before you deliver goods or services.

How do I get set up to process commercial cards properly?

Contact your merchant processor to ensure that you are set up to properly accept commercial credit cards and obtain the best possible rates.

This information is brought to you by First Horizon Merchant Services. For questions on the association’s credit card processing program, call Kimberly Layton toll-free at 1-866-638-8614, or e-mail kalayton@fhms.com.

Reprinted from Floor Care Professional, June 2008