We’ve all been there – using our trusty credit cards for business expenses, supplier payments, and more. It’s convenient, sure, but is it really the best way to handle B2B transactions? The convenience they offer is undeniable, allowing us to manage our financial affairs with relative ease. But, as with any longstanding practice, it’s important to periodically pause and reflect on whether we’re still on the right track. In this blog, we’ll take a look at the prevalence of B2B credit card payments, the reasons why you might want to think twice, and how this affects small businesses.
Why You Should Stop Using Credit Cards for B2B Payments
High Processing Fees
One significant drawback of using credit cards for B2B payments is the high processing fees. Credit card companies charge businesses a percentage of the transaction amount as a fee, which can quickly add up, especially for large payments.
Card processing fees in the US generally run from about 1.15% to 3.30% per transaction, depending on the card network and card type (WalletHub). Say your business pays $10,000 a month in supplier invoices by card at a 2.5% rate. That’s $250 a month in fees, or $3,000 a year, just for the privilege of paying your bills.
Challenges with Reconciliation
Reconciliation is a critical aspect of financial management in any business. When a bunch of business transactions happen with credit cards, it’s hard to keep things neat. You have to make sure what you spend matches up with what you paid and what you owe. If this doesn’t add up right, it can cause problems and make it tough to manage your finances well. Keeping your accounting records in order is super important for making smart financial decisions and running your business smoothly.
Long Processing Times
Credit card payments might look really quick, but there’s more to it than meets the eye. When you make a payment, the first step happens instantly - it checks if you have enough funds on your card. But the second step, where the money actually moves from your bank to the seller, can take 1 to 3 workdays. This delay can be a problem for both parties. It can mess up your plans because you don’t know for sure when the money will be ready to use. To avoid these issues, it’s important to understand how credit card payments work and consider other ways to pay that are faster.
Fraud and Security Risks
While credit cards are handy, they aren’t foolproof. They can be targeted by cybercriminals looking to make unauthorized charges. Dealing with these fraudulent charges can be a lengthy and expensive process, taking your focus away from your core business. Moreover, falling victim to credit card fraud can harm your business’s good name and shake the trust of your customers and partners.
Card fraud losses worldwide hit $33.41 billion in 2024, and the US accounted for about 42% of that total (Nilson Report, via press release). Businesses aren’t immune either. 76% of US organizations faced attempted or actual payments fraud in 2025 (AFP).
What Are Alternatives to B2B Credit Card Payments?
Instant Payments
Instant payments offer a swift and secure way to make Business payments. Thanks to the FedNow® Service and RTP® Network, instant payments in the United States have shifted into high gear. These payment methods offer a swift and secure way to conduct B2B transactions, often taking a mere 60 seconds from start to finish; even after-hours or on weekends.
Adoption is climbing fast. The FedNow Service now counts more than 1,800 participating banks and credit unions, and it settled 8.4 million payments worth $853.4 billion in 2025. The RTP Network processed 128 million payments worth $480 billion in the first quarter of 2026 alone (Digital Transactions). But here’s the exciting part: by 2028, these speedy payment methods could replace a whopping $18.9 trillion worth of ACH and check payments for businesses in the United States. It means a big change is on the horizon, and lots of money is going to move faster and more efficiently. So, in the near future, we might say goodbye to the slow ways of paying bills and welcome a much quicker and smarter approach.
Same-Day ACH Payments
Automated Clearing House (ACH) payments are a reliable and cost-effective alternative to credit cards. They allow businesses to initiate same-day payments, ensuring that funds reach the recipient’s account promptly. It’s essential to know that “same-day” ACH doesn’t mean instant ACH transfer because it relies on the bank’s working hours. ACH payments are known for their security and ease of reconciliation, making them a practical choice for B2B transactions. Fees vary by platform and bank, but same-day ACH usually costs far less than card processing. With Forwardly, you only pay for same-day speed when you choose it.
Future of B2B payments
Looking ahead to the future of business payments, there are some exciting changes in store that make financial transactions more friendly and efficient. Instant payments have gone from a novelty to the norm. FedNow only launched in July 2023, and it’s already live at more than 1,800 financial institutions. They’re quick, safe, and often cheaper than the old way of using credit cards. The best part is they help your business avoid those frustrating delays in getting the job done on time.
Now, let’s talk about keeping your money safe. With all the online risks these days, businesses are looking for ways to protect their money and data. That’s why using your biometric authentication, trusted payment processors, or platforms to make sure your payments are safe is crucial. These new ways to pay not only keep your business safe but also make your partners and customers trust you more.
What does this mean for small businesses? Well, they often have tight budgets, and those high fees for credit card payments can be a real pain. But with these new payment methods, they can save money. Bank payments like ACH usually cost a fraction of card processing fees, especially on larger invoices. Plus, getting their money faster with options like instant payments and same-day payments means they don’t have to worry about unexpected delays. Small businesses can use these new ways of paying to build a strong financial foundation and focus on growing and succeeding. In the end, even though B2B payments are becoming more high-tech, they’re also becoming more about making life easier for businesses of all sizes, so they can do their work with confidence and ease.
Experience the power of Forwardly for small businesses
Looking to move away from costly card payments? Forwardly lets you pay vendors and get paid by ACH, same-day ACH or instant payment, with funds landing in about 60 seconds. There are no monthly fees; you pay per transaction, based on how fast you want the money to move. Cards are still there when you need them. You can pay a vendor by card to stretch cash flow or earn rewards, and choose bank payments for everything else. Everything syncs with your accounting software, so reconciliation takes care of itself. Start your free trial.
Join Forwardly today for a smarter way to do business.
By:
Jane Ingram
Published
