Accepting government credit cards are an essential method of payment for many businesses that work with federal, state, and local government agencies. While any payment processor can technically set up businesses to accept these cards, not all processors will help you optimize your payment system to achieve the lowest possible fees. This is where Level 3 credit card processing comes in.
The Hidden Opportunity: Lowering Fees with Level 3 Processing
Many businesses that accept government purchase cards are paying unnecessary fees because they’re not taking advantage of Level 3 processing data. This specialized processing offers the potential to lower your transaction fees from an average of 2.70% to 1.9%—a significant reduction that can improve your bottom line. Make sure you are accepting government credit cards properly.
What is Level 3 Processing?
Level 3 processing is designed to handle B2B (business-to-business) and B2G (business-to-government) transactions. This includes providing detailed line-item data, such as item descriptions, quantities, and costs—data that government purchase cards require to qualify for lower rates. By providing this detailed information at the point of sale, you unlock lower processing fees that can reduce the overall cost of accepting payments.
Why Should You Care?
If you’re accepting government purchase cards but not using Level 3 processing, you could be leaving money on the table. Here’s why:
- Interchange Complexity: There are over 937 interchange rates. Government purchase cards qualify for specific rates, but to benefit, you need to provide the necessary data.
- Hidden Costs: 80% of the fees related to processing government purchase cards are tied to interchange, not the processor’s rate. Missing key Level 3 data can silently add costs.
- Constantly Changing Rates: Visa and Mastercard update interchange rates every April and October. Keeping up with these changes ensures you’re always getting the best deal.
Getting Set Up
While accepting government purchase cards and sending Level 3 data is a step in the right direction, it doesn’t guarantee you’ll receive 100% of the incentives available. In fact, many businesses mistakenly assume that sending Level 3 information automatically qualifies them for the best rates. The key to unlocking the full rebate potential lies in how your processor sets up your account.
Why You Need a Processor Who Understands the Space
The configuration of your payment system is critical. Without the proper setup, you may only be receiving a fraction of the available benefits. Not all processors are equipped to handle the complexities of government purchase card transactions, and without a clear understanding of how to capture all necessary data fields, you could be missing out on significant savings.
With over 30 years of experience in payment processing, we specialize in ensuring that our clients are set up correctly to maximize savings from government purchase cards. Our expertise is why Army, Navy, Marines, and Air Force personnel consistently refer businesses to us—they know we do it right and have been doing so for nearly three decades.
The Untapped Potential:
This program has been around for more than 15 years, yet studies show that 3 out of 5 businesses are not set up properly to fully benefit from the rebates available. This means many businesses are leaving money on the table, paying higher fees than necessary.
By partnering with us, you can rest assured that we’ll handle the details and ensure you’re 100% set up to take full advantage of the incentives, saving you money and maximizing your margins.
Getting Started
To start accepting government purchase cards at the lowest rate, you’ll need to:
- Switch to a payment processor that offers Level 3 processing for B2G transactions.
- Ensure that the necessary Level 3 data fields are captured during the transaction. This might require updating your payment systems to support detailed invoicing and line-item data.
- Monitor your processing statements to ensure you’re getting the rates you deserve and that all required data is included.
Maximize Your Margins
Switching to Level 3 processing could lead to immediate cost savings. By optimizing your payments for government transactions, you can reduce processing fees and keep more money in your business. Let us help you unlock the full benefits of government card payments while ensuring you’re always paying the lowest fees. Questions about Accepting government credit cards or want to speak with an expert, give us a call today 888 790 3450 or email info@ revolution-payments.com