Government Contractor Credit Card Processing: In today’s competitive market, government contractors face various challenges, from stringent compliance regulations to intense competition. One of the most overlooked areas that can have a significant impact on a contractor’s bottom line is credit card processing fees. Surprisingly, many contractors rely on traditional bank setups that may not offer the best rates or advanced solutions tailored to the unique needs of B2B (business-to-business) and B2G (business-to-government) transactions. The good news? There are solutions that can reduce these fees by up to 50%—potentially lowering costs to just 1.9%, as opposed to the standard 2.7% or more.
Understanding Level 2 and Level 3 Processing for Contractors
Both Visa and Mastercard offer reduced interchange rates for corporate, government, and purchasing card transactions when Level 2 or Level 3 data is included in transaction processing. Let’s break down the benefits of these processing levels:
- Level 2 Processing: Level 2 data adds detailed information like the sales tax, customer code, and postal code, which can help qualify a transaction for lower rates compared to the standard Level 1. However, many contractors remain unaware of these cost-saving possibilities.
- Level 3 Processing: This level includes even more detailed data, such as item descriptions, quantities, and unit prices. It’s specifically designed to support B2B and B2G transactions and can significantly lower processing rates. MasterCard and Visa reduce interchange fees for government and corporate purchasing cards when Level 3 data is provided, allowing businesses to save considerably.
The Impact on Contractors’ Bottom Line
When contractors optimize for Level 2 and Level 3 processing, they often qualify for specialized interchange rates reserved for B2B and B2G transactions, making a meaningful difference in their fees. With these savings, contractors can redirect funds toward growth, compliance, and other pressing needs. In fact, many contractors don’t realize that 75-80% of B2B and B2G transactions are eligible for these lower interchange rates but are often processed at higher rates because they are not set up for Level 2 or Level 3 data. This oversight can lead to a missed opportunity for savings that can reach up to 1% or more on each transaction—adding up to thousands in avoidable costs each year.
Why Most Government Contractors Overpay on Credit Card Fees
Many contractors assume that their processing rates are fixed and have no room for improvement, especially if they rely on their bank’s default solutions. Unfortunately, bank setups don’t always integrate the data-capture requirements needed for Level 2 and Level 3 processing. As a result, contractors may pay as much as 80-150 basis points (0.8% to 1.5%) more than necessary per transaction.
By providing compliant Level 3 data, contractors not only benefit from lower rates but also gain valuable insights into spending patterns, which can help streamline accounting and reporting efforts. In an industry where compliance and transparency are crucial, meeting Level 2 and Level 3 standards aligns well with broader industry demands for accountability and cost control.
How Level 3 Processing Can Lower Fees for Government Contractors
At Revolution Payments, we understand the complexities of credit card processing for government contractors. We’ve developed an advanced Level 3 processing solution specifically designed to help contractors qualify for lower rates automatically. This technology takes the guesswork out of compliance and optimizes every eligible transaction to ensure it clears at the lowest possible interchange rate. The result? Many of our clients experience up to a 50% reduction in processing fees—without having to switch processors or change their established processes.
The Benefits of Level 3 Credit Card Processing with Revolution Payments
- Significant Cost Savings: For every $100,000 in B2B and B2G transactions, lowering rates by just 1% translates into $1,000 in savings—savings that add up significantly over time.
- Improved Reporting and Compliance: Our system enables contractors to meet reporting requirements effortlessly, reducing administrative time and aligning with procurement guidelines.
- No Disruption to Business Operations: Our Level 3 processing solution integrates smoothly, meaning contractors don’t need to change processors to access these lower rates.
- Enhanced Transparency: Revolution Payments is dedicated to transparency, ensuring contractors understand each fee and transaction cost, enabling better financial planning and forecasting.
Next Steps to Start Saving Today
If you’re a government contractor processing B2B or B2G payments, now is the time to ensure you’re not leaving money on the table. Revolution Payments offers a free, no-obligation analysis to identify potential savings in your current setup. Simply email a recent statement to info @revolution-payments.com, and we’ll provide a confidential, complimentary analysis. With our proven technology, contractors across the industry are already enjoying substantial savings and a streamlined approach to payment processing.
For more information, about Government Contractor Credit Card Processing give us a call at 888-790-3450 and let’s discuss how we can help optimize your payment processing for maximum savings.