The Rise of Business Credit Cards in Supplier Payments

More small businesses in the UK are paying suppliers with business credit cards. The reasons are clear:

• Flexible access to working capital
• The ability to extend payment terms without renegotiating contracts
• Increasingly generous rewards schemes

But while the growth of card usage benefits buyers, the impact on suppliers is less straightforward.

Why UK SMEs Are Turning to Business Credit Cards

Flexibility – Business owners can manage seasonal cash flow more easily.

Working Capital Extension – Paying by card effectively extends terms by up to 45 days.

Rewards and Cashback – Many business cards now offer cashback, travel points, or discounts that incentivise spend.

With bank lending often harder to access, cards have become a simple tool for managing liquidity.

The Risks for Suppliers

1. Absorbing Costs

When customers use cards, suppliers bear the acquiring fees. These range from 1.5% to 6% depending on card type, transaction channel, and acquirer pricing. For SMEs with slim margins, these charges can make a significant difference.

2. Complex Pricing Structures

Many suppliers are unaware of the full acquiring cost because of tiered and blended pricing models. The real cost of acceptance often comes as a surprise when reconciled.

3. Delayed Settlement

Unlike instant bank transfers, card payments often settle after 24–72 hours. Weekends and holidays extend this further, creating short-term cash flow challenges.

The Bigger Picture

According to UK Finance, corporate and business card spend has grown year-on-year as SMEs lean on them to manage liquidity. Combined with reward schemes, this trend shows no sign of slowing.

For suppliers, the implication is clear: card acceptance must be planned for strategically, not absorbed as an unexpected cost.

The Stable View

Card acceptance can be a competitive advantage. Offering buyers the ability to pay by card may be the difference between winning or losing a contract.

However, suppliers should:

• Benchmark acquiring costs regularly against the market.
• Factor fees into pricing to protect margins.
• Be transparent with buyers about the impact of card usage.

At Stable, we help SMEs make informed decisions on how they borrow, collect, and pay — ensuring payment strategies support growth rather than erode margins.

Key Takeaway

The rise of business credit cards in supplier payments is a structural shift in UK B2B trade. Suppliers who adapt — by treating card acceptance as a strategic choice — will protect cash flow, defend margins, and remain competitive.