How much can a merchant save by supplying Level 3 data

How much can a merchant save by supplying Level 3 data (level 3 processing) on your B2B & B2G cards? This blog shows you.  I get that questions a lot.  You will always pay roughly 1% more than the lowest rate a processor can give you, when you accept commercial and purchase cards w/o level 3 data.

MasterCard and Visa use interchange rates to determine how much you pay to accept a certain type of credit card.  100% of these interchange fees go back to the card issuing bank and amount to 75%-90% of your total expense for accepting credit cards.

What most people selling to businesses and government have not been told is that for (B2B) Business-2-Business & (B2G) Business-2-Government transactions, interchange falls into 1 of 3 different interchange rates. Level 1, level 2 and level 3.  commercial transactions are the only cards you accept have have these different processing levels.

These different “interchange levels” depend on what additional data you enter with the transaction,  Level 3 data is information you would generally find on an invoice. If this information is missing from the transaction, the transaction qualifies at level 1 interchange and you end up paying .80% or more in interchange fees before your processor adds their rate.


Level 3 data savings


You can see the value level 3 processing provides for companies accepting B2B, commercial or government cards. This pick shows how “interchange” varies on exact same transaction, whether or not you include level 3 line item detail.. Remember, this happens on an interchange level before processors add their rate. Accept a commercial card w/o level 3 detail, it qualifies at level 1. You can see how much higher you pay in interchange as a result. You pay 80 basis points more for a card not present commercial/P-card.

whether level 3 detail is entered, if not, the transactions clears at a different interchange rate (level 1) and has an interchange cost of roughly 1% more.

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