Credit card processing levels
Credit card processing levels refers to the additional line item details that are included with a credit card transaction. Level 1 processing refers to business-to-consumer (B2C) transactions, during which consumers use a personal credit cards to make purchase. The data required for a Level 1 transaction is minimum including the merchant name, transaction amount and date.
Level 2 processing can provide you a rate reduction but not as much as level 3 processing. It includes level 1 payment detail and some additional line items.
- Merchant Name
- Transaction Amount
- Merchant Zip Code
- Transaction Date
- Tax Amount (Between 0.1% and 22% of the total amount)
- Customer Code or PO number
If your business provides services/goods to other businesses (business-to-business (B2B) or (business-to-government (B2G), level 3 processing can lower the interchange fee you pay to accept these cards.
Many companies are leaving large amounts of money on the table and do not realize it. The fees associated with accepting credit cards are a part of doing business, but it is possible to reduce the impact of these higher interchange fees with Level 3 payment processing.
Level 3 processing requirements
Level 3 credit card processing captures specific line item detail about a transaction.
The most common level 3 detail line items include:
- Merchant name
- Transaction amount
- PO#/Customer code
- Order #
- Freight amount
- Destination postal code
- Ship from Postal Code
- invoice Number
Why should you be concerned about level 3 processing?
Savings, to encourage merchant participation and support level 3 processing, Visa and MasterCard have created special incentive rates, lowering a merchants cost if level 3 detail is provided. This can often mean a 30% to 40% reduction in processing fees, allowing for substantial reclaiming of margin.
Keep in mind, standard credit card terminals do not support the additional data required to receive level 3 interchange rates however, with Revolution payments new interchange optimization program businesses using a terminal can now take advantage of the lowest interchange rates level 3 processing provides. Our powerful software runs behind the scenes and automatically attaches this information before the transaction settles.
If you are not processing with Revolution payments, you need to adopt a virtual terminal capable of capturing the additional line item detail Visa and MC require.
Have questions regarding these different credit card processing levels
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