If you're a distributor or manufacturer accepting credit card payments, there's a good chance you're leaving significant money on the table. And the way most processors quote rates makes it very difficult to see where.
Kodaris has been in the payment processing space for over 10 years. We specialize in B2B. And even with that experience, the landscape keeps shifting. New regulations, new card types, new Visa and Mastercard rules. It takes constant monitoring and real technology to make sure you're getting the best rates on every transaction.
Most processors quote you a basis point markup above interchange. 15 BPS. 20 BPS. That's the number everybody looks at. But it only tells you part of the story.
In B2B, your customers carry different card types. Business cards, points-back cards, cashback cards, consumer cards, debit cards. Each carries a different interchange rate from Visa and Mastercard.
The card brands offer a lower interchange rate on business cards if you submit what's called level two and level three data, meaning line items, taxes, shipping, submitted on the processing rails in a specific format. Submit it correctly and your interchange can drop by nearly a full percent. On $20 million in processing, that's a significant number.
Your processor's basis point markup stays the same regardless of whether they submit that level three data for you. So if their gateway doesn't support it, or if they're simply not doing it, you're paying the higher interchange rate. They still collect their margin. You absorb the difference.
Let's say you're comparing two processors. One quotes 15 BPS. The other quotes 20 BPS. The 15 BPS processor looks like the obvious choice. But if they're not submitting level three data and the 20 BPS processor is, you could end up paying 25 or 30 BPS effective rate on the 15 BPS quote because the interchange underneath it never dropped.
It gets worse. Some of the large processors will submit the level three data but keep half the savings for themselves. They can afford to quote you a lower basis point because they're making up the difference on the interchange optimization they're not passing through to you. If those savings amount to $50,000 or $100,000, they're keeping $25,000 to $50,000 that should have been yours.
Then there are the add-ons. Dues and assessments fees that can run 3 to 20 additional basis points. Terminal rentals at $300 to $400 a month for equipment you could purchase outright for $300 to $500. All of these get layered on top of what looked like a competitive quote.
At Kodaris we keep it simple and transparent. We quote above-interchange basis points, but we also analyze all your transactions from recent months. We give you a full analysis showing every fee you're paying, every opportunity to save on interchange, and exactly what level three optimization would do for your specific card mix.
We pass through one time purchase terminal costs. We submit full level three data on every transaction. And we keep working at it. Card Brand rules change. New regulations like CEDP replace old standards. Kodaris invests in the technology to stay current so you don't have to.
But there's another piece most people miss. Beyond the swipe rate, how many disconnected systems are you running? A third-party provider for your customer online payment portal. A different provider for integrated ERP payments. Another one for commerce. Another for card present. All disjointed, all with different rate quotes, none of them optimized.
On the Kodaris platform, we tie all of that together. One processor, one plan. AR online payments, integrated ERP payments, card present, commerce. All running through the same level three optimization. And when you consolidate like that, you also reduce the reconciliation overhead for your finance team. Balancing transactions daily, reconciling monthly, pulling data from four different systems. That operational cost is part of your real cost of accepting payments, even though it never shows up on a rate quote.
We've helped customers save anywhere from $50,000 to $500,000 a year. Some have saved nearly $2 million over three years. It depends on your current setup, your card mix, your transaction volume, and how much optimization is happening today.
If you're interested, get in touch with us to receive a full analysis with no obligation.. Even if Kodaris isn't the right fit, you'll know exactly what you're paying and where the opportunities are.
Accepting payments shouldn't feel like a tax on your business. It's something worth taking a closer look at.