If your business accepts credit card payments from other businesses or government entities and you’re not using level 3 credit card processing you could be leaving substantial savings on the table. Most businesses don’t realize that the majority of fees they pay to accept credit cards have little to do with the processor’s rate. Instead, these fees are driven by interchange, the amount paid to the card-issuing bank. For B2B transactions, not submitting Level 3 data can increase your interchange costs by 1.5% or more, before even factoring in the processor’s fee.
What is Level 3 Processing and Why Does It Matter?
Level 3 credit card processing involves submitting additional transaction data (often similar to what you’d find on an invoice) for commercial, business, purchase, fleet, or government credit cards. Providing this extra data helps qualify your transactions for lower interchange rates, directly reducing your fees. For example, without Level 3 data, you could pay 80 basis points more for the same transaction.
For instance, if you have a cost-plus merchant account and accept a keyed-in purchase card, you could be paying 1.90% or 2.70% in interchange fees. Including Level 3 line-item detail ensures the lower rate of 1.90% applies. If the detail isn’t included, the transaction clears at 2.70%, needlessly increasing your costs.
The Misconception About Processor Rates
Over my 25 years in the payments industry, I’ve seen countless businesses focus solely on processor rates when evaluating their fees. While a low processor rate is important, 80% of the fees a business pays come from interchange, which is set by the card networks, not the processor. Without Level 3 credit card processing, you’re likely paying more than you should, especially for B2B or B2G transactions, where the wrong interchange category can cost you 1.9% more on each transaction.
It’s not just about finding the lowest processor rate; understanding interchange and how to optimize it is critical to minimizing your overall cost of accepting payments. If you’ve never had a detailed interchange audit or a Level 3 processing savings analysis, you’re almost certainly missing out on significant savings.
How to Save Up to 40% on B2B and B2G Transactions
At Revolution Payments, we specialize in helping businesses lower their costs by up to 40% on B2B and B2G transactions through Level 3 data processing—without changing their processor. When processing these types of transactions without Level 3 data, businesses can pay an additional 80 to 150 basis points in interchange fees, unnecessarily driving up costs.
For larger transactions, such as:
- Visa transactions over $7,755.56
- MasterCard transactions over $10,000
- Government card transactions over $5,557.14
If Level 3 data is provided, these transactions qualify for Commercial Product Large Ticket Interchange rates, which can save your business a substantial amount of money.
Why Your Rate Structure Matters
To benefit from Level 3 processing, it’s essential to be set up with the right payment device and a cost-plus pricing structure. This ensures your transactions clear at the lowest possible interchange rates. We frequently encounter merchants who have the capability to submit Level 3 data but are on the wrong pricing structure, resulting in higher fees.
Whether or not you process Level 3 payments, having a cost-plus rate structure is vital to ensuring your transactions clear at the lowest rates possible. If you’re not sure whether you’re set up correctly, now is the time to find out.
Why Work with Revolution Payments?
With over 25 years of experience helping businesses optimize their payments and qualify for Level 3 interchange rates, Revolution Payments is here to help you reduce your fees and improve your bottom line. Our automated Level 3 optimization solution handles the heavy lifting, ensuring you qualify for the lowest rates with no additional work on your end.
If you have questions about Level 3 credit card processing, or if you’d like to see how much your business could be saving each month, give us a call at 888-790-3450 or email info @revolution-payments.com.
Don’t leave money on the table—let us show you how Level 3 processing can lower your costs and help your business thrive.