The Challenge
Mike S. owns a general contracting company in the Phoenix metro area that specializes in commercial tenant improvements, retail buildouts, and light industrial construction. The company handles 15–20 active projects at any time, with contract values ranging from $50,000 to $500,000. Annual card payment volume is approximately $1.6 million — primarily progress payments (draws) and final payments from property managers, commercial tenants, and corporate clients.
The company's previous processor charged a bundled rate of 3.2% + $0.25 per transaction. With an average payment size of $35,000, the per-transaction processing cost was substantial — approximately $1,120 per draw payment plus the $0.25 per-transaction fee. At $1.6 million in annual volume, total processing costs were approximately $51,500 per year.
The high percentage of corporate card payments made this pricing especially costly. Approximately 75% of payments came from corporate purchasing cards and fleet cards issued by property management companies and commercial clients. Like many construction companies, Mike had no idea that corporate card transactions could qualify for significantly lower interchange rates with enhanced data submission — his processor had never discussed it.
Cash flow was also a challenge. The company invoiced clients for draw payments, then waited for checks in the mail — an average of 22 days from invoice to payment. The delay created cash flow gaps that occasionally required short-term credit lines to cover subcontractor payments and material costs.
“Our average draw payment is $35,000. At 3.2%, we were losing over a thousand dollars per transaction to processing. PaySec cut that cost nearly in half.”
— Mike S., Owner, General Contracting Company
The Solution
PaySec set up a dedicated merchant account with Network Offset Pricing, replacing the 3.2% bundled rate with interchange passthrough. For construction companies processing high-ticket B2B payments, the difference between bundled and passthrough pricing is amplified — on a $35,000 draw, even a 1% rate improvement saves $350 per transaction.
PaySec configured automated Level II data submission for all card-not-present transactions. When Mike's office manager sends a payment link or keys in a phone payment, the gateway automatically appends the tax amount, customer code, and merchant postal code required for Level II qualification. For the company's heavy corporate card volume, this pushes transactions from the default commercial interchange tier (typically 2.50%–2.70%) to the optimized Level II tier (typically 1.80%–2.05%).
To address the cash flow problem, PaySec configured payment links for draw invoicing. Instead of mailing an invoice and waiting for a check, Mike's office manager now emails a secure payment link with the draw amount and project details. Clients click the link, enter their card information (or use a stored card for recurring projects), and the payment processes immediately. Funds are deposited the next business day.
PaySec also set up project-based transaction tagging so the company can track processing costs per project — essential for accurate project cost accounting and margin analysis.
“Level II optimization was the key. Most of our clients pay with corporate cards, and PaySec's system automatically qualifies those for lower rates. Our old processor never even mentioned this was possible.”
— Mike S., Owner, General Contracting Company
The Results
PaySec's Network Offset Pricing combined with Level II optimization reduced the company's effective processing rate from 3.2% to approximately 1.95% — a 39% reduction in total processing costs. Over the first 12 months, the company saved more than $26,000 in processing fees.
The Level II optimization was the primary savings driver. On the 75% of volume paid with corporate cards, transactions moved from the default commercial interchange tier to the optimized Level II tier — saving approximately 0.55%–0.70% per transaction. On a single $35,000 draw payment, that represents $190–$245 in savings per transaction compared to the old bundled rate.
The payment link feature transformed the company's cash flow cycle. Average collection time dropped from 22 days to 3 days. Clients who previously mailed checks now pay electronically within hours of receiving the payment link. The company was able to close its $150,000 revolving credit line — which had been used solely to bridge invoice-to-payment gaps — saving approximately $4,800 per year in interest and fees.
The total first-year financial impact — processing savings, credit line elimination, and reduced administrative time on collections — exceeded $35,000. Mike is now encouraging clients who had been paying by check to use the payment link instead, which will increase card volume and further amplify the cash flow benefits.
“The payment link feature changed how we collect. Instead of waiting for a check in the mail, I send a link and get paid the same day. Our average collection time dropped from 22 days to 3.”
— Mike S., Owner, General Contracting Company
Disclaimer: Results are based on this merchant's specific transaction volume, card mix, and pricing structure. Individual savings vary. The 39% fee reduction reflects the difference between the merchant's prior bundled rate and their PaySec effective rate over the first 12 months. Level II optimization savings depend on the proportion of qualifying corporate card transactions. Collection time improvements depend on client payment behavior. PaySec does not guarantee specific savings percentages.