Unlock unexpected cost savings in your payment strategy: the commercial card optimization opportunity

Large organizations are increasingly turning to cost-saving initiatives to improve the bottom line and free-up cash for strategic investments. Survey research from Deloitte* shows that 47% of respondents planned to reduce overall operating costs, rather than optimizing company spend or growing sales – demonstrating that competitive pressures and macroeconomic conditions are forcing organizations to look inward to protect profits. For finance leaders, this means turning to accounts receivable operations to find quick and effective strategies for reducing expenses and delivering value.

Businesses are counting the costs of card acceptance

In particular, accepting commercial card payments often results in higher interchange acceptance rates. Mitigating the increased costs often requires investing significant time and energy into gathering, organizing, and transmitting enriched transaction details with each commercial card payment accepted. Capturing additional transaction details at the time of payment helps to better authenticate the transaction and provides useful information for the card issuer; this means that the transaction carries less risk and may qualify the commercial card payment for lower interchange rates. These available lower interchange rates, established by Visa and Mastercard for their branded commercial cards, offer huge opportunities for cost savings.

Mastercard commercial card optimization

To achieve better processing rates, businesses must accept purchasing cards, corporate cards, business cards or government spending accounts (GSA) issued by Mastercard.* Then, they must submit transaction details that satisfy certain requirements to qualify for each level’s rates.

• Level 1 processing only requires standard transaction details such as payment amount and date of the payment.

• Level 2 processing adds applicable sales tax and a customer identifier to the transaction.

• Level 3 processing in general requires 20 or more fields of line-item detail that must be captured and sent with every commercial card transaction authorization. These include tax ID, shipping ZIP, freight amount, item description, quantity and product code, among others.

Visa CEDP

Starting in April 2025, Visa began rolling out new requirements for merchants to qualify for lower rates on commercial card transactions, called Visa Commercial Enhanced Data Program (CEDP).* Using machine learning algorithms, Visa now checks the quality of transaction data flowing through its network and assigns a “CEDP verified” status before a merchant’s eligible transactions can qualify for lower rates up front.

• Level 1 processing only requires standard transaction details such as payment amount and date of the payment.

• Visa Product 3 processing requires applicable sales tax, a customer identifier, tax ID, shipping ZIP, freight amount, item description, quantity, product code and other line-item details that must be captured and sent with every commercial card transaction authorization.

Don’t go it alone – partnering with a payments processor saves time and money

Rather than trying to build an in-house payments optimization program, companies can partner with their payment processor. A well-managed commercial card optimization program can help eliminate time-consuming processes and the overhead of specialized gateways, third-party middleware or other tools needed for gathering and transmitting the required enriched transaction data. It also helps organizations remain validated and stay current with changes in card brand rules and interchange rates in the commercial card environment.

Big opportunities for certain industries

Organizations that accept high volumes of B2B payments can boost cost savings by implementing and maintaining a commercial card optimization program – especially for frequent high-value transactions. For example, the following industries typically receive large volumes of commercial card payments and would greatly benefit from payment optimization efforts:

1. Government services
2. Industrial supply
3. Business services
4. Utilities
5. Healthcare/medical services
6. Construction, lumber, and building materials
7. Durable goods/commercial equipment
8. Electrical, HVAC, plumbing, life safety
9. Non-durable goods
10. Insurance

Despite persistent competitive pressures and changing macroeconomic conditions, companies can still improve profit margins and cash flows by finding cost savings in financial operations. Partnering with a payments processor on commercial card optimization can help organizations save on payment acceptance costs, without having to invest heavily in staff or technology to transmit the required data to Visa and Mastercard.

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