At this year’s Windy City Summit, surrounded by treasury leaders from some of the world’s largest commercial banks, one conversation kept coming up: supplier buy-in is still the single biggest barrier to commercial card adoption.
Despite all the innovation across B2B payments, this friction point remains. In fact, it was recently reinforced by our own findings at Codat. In a survey we ran late last year, over one-third of respondents (33.7%) said their suppliers still prefer or only accept checks, a telling sign that card adoption continues to face resistance.
Why does supplier buy-in remain so hard?
The short answer is the value exchange is broken. This is what a typical card transaction looks like:
🛍️ Buyers get rebates.
🏦 Issuers collect interchange.
🤔 Suppliers are left absorbing the cost of card acceptance, often around 3% of gross revenue.
For businesses operating on tight margins, that 3% can be the difference between black and red.
Surcharging: a ‘solution’ with strings attached
There have been efforts to restore balance. Surcharging, for example, lets suppliers pass card fees back to buyers. In theory, it’s a logical fix. In practice, uptake is minimal.
According to industry data, only about 10% of businesses do it, and in B2B, the number is likely even smaller. There are three main reasons for this:
- Customer relationship risk:
The most immediate concern for suppliers is relational. Introducing a surcharge, particularly without context, can feel like shifting the burden onto the buyer (which it is). In industries with competitive pricing, low switching costs, and commoditized products, even a small fee can nudge a buyer to look elsewhere.
- Compliance complexity:
Surcharging is regulated by a confusing and, at times, contradictory set of rules layered across card networks, state laws, and even buyer geography. For example, card network rules dictate strict limits on how and when surcharges can be applied, like:
- Not exceeding the merchant’s cost of card acceptance
- Not applying to debit or prepaid cards
- Having to be disclosed in advance
State and local laws complicate things further. Some states prohibit surcharging entirely. Others allow it under specific (and varying) conditions. Even the interpretation of the rules can be inconsistent.
This gray area leaves suppliers vulnerable to penalties on either side, be it fines from card networks or legal action under state law.
- It’s not just one fee
To make things even murkier, the term ‘surcharge’ is often used as a catch-all for multiple fee types, each with its own rules and restrictions.
For example, a convenience fee (a flat fee allowed only in card-not-present transactions and only if the merchant accepts other forms of payment) differs from a true surcharge that is percentage-based, card-only, and heavily regulated.
With the risk and complexity seemingly outweighing the perceived benefit, many suppliers simply reject cards entirely.
Supplier acceptance is a problem banks can’t afford to ignore
When suppliers say no to cards, banks lose an awful lot more than the interchange.
Commercial card programs thrive on volume. The math is simple: the more spend that flows through cards, the more interchange revenue issuers collect, the greater the float income, and the faster the program scales. But every time a supplier insists on checks or sticks with ACH, that momentum stalls. And it doesn’t stop at lost revenue.
Commercial clients increasingly want to pay by card – for the working capital advantages, the rebates, and the streamlined reconciliation. When suppliers reject cards, it creates a frustrating gap between what buyers expect and what they can actually do. Over time, that disconnect chips away at your product’s value proposition and erodes client satisfaction.
Many banks are investing heavily in commercial card infrastructure, but without supplier buy-in, the returns won’t materialize. All the innovation in card platforms, all the spend controls and dashboards, won’t matter if the suppliers don’t play ball.
The institutions that will win in this space are those that treat supplier enablement as a core strategic function rather than an afterthought. They’ll invest in outreach that’s personalized, not generic. They’ll equip their teams with context, not just quotas. And they’ll offer bespoke propositions, not one-size-fits-all incentives.
Reframing the conversation from “can” to “why”
For banks looking to drive greater adoption of commercial cards, it’s essential to shift the narrative. Instead of asking, “Can the supplier accept card payments?”, the focus should be, “Why would they want to?”. That small shift in framing changes everything.
Because in most cases, suppliers can accept cards. But they choose not to, often for good reason. Whether it’s margin pressure, complex surcharging rules, or concern over damaging customer relationships, their hesitation is rooted in legitimate business realities.
If banks want to change that outcome, they need to change their approach. And it starts by equipping card specialists and treasury consultants with the right context and data that turns a cold ask into a meaningful conversation.
Instead of leading with a generic question: “Will you take card?”
Lead with a clear, tailored offer:
“If you switch to card, you’ll get paid faster, reduce your DSO, and eliminate late payment penalties. You’ve already offered 2% for early ACH, would guaranteed Net 10 on card work better?”
How Codat helps
Codat helps card specialists and treasury teams approach the supplier acceptance conversation with real intelligence. We give teams the data they need to move beyond the cold, generic ask and into strategic, personalized offers that resonate.
With Codat, banks can quickly understand:
- 🔍 Payment history: How the supplier is currently paid and what’s likely to drive a change.
- ⏱️ Term dynamics: Whether the supplier is on 30, 60, or 90-day terms and whether they’re actually being paid on time.
- 📉 Discount behavior: Whether the supplier offers early payment discounts and if buyers are capturing them.
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