Level 3 Credit Card Processing | Lowers Processing Rates


Level 3 Credit Card Processing | Lowers Processing Rates

Take your Business to a New Level with Level 3 credit card Processing

Any merchant service provider can set up a merchant account up to accept business-to-business (B2B) and business-to-government (B2G) purchases, however  Level 3 processing can reduce your interchange cost of accepting B2B & B2G transactions by 1% and more. Level 3 Credit Card Processing Lowers Processing Rates

What is Level 3 Credit Card Processing?

In simple terms, level 3 processing is a different way of accepting commercial cards from your clients. It requires entering additional line item detail about the sale. It defines “what” is being purchased, “’how” the sales takes place, “who” is involved in the transaction, and “when” it takes place, much like you would find on an invoice, however in this case the information is combined with the basic payment info and sent to the acquirer for approval.

Visa and MasterCard use interchange rates to determine what you pay each time you accept a certain type of credit card. What most people don’t realize, or have not been told, is that commercial cards fall into 1 of 3 different interchange categories, level 1, level 2 and level 3.  The higher the level, the lower the interchange rate.

The description below shows Visa’s (actual) interchange rates for commercial cards at the time of writing this.

  • Commercial Level III 1.90% + $0.10 
  • Commercial Level II 2.50% + $0.10
  • Commercial Card Present 2.50% + $0.10
  • Commercial Card Not Present 2.70% + $0.10  

You can see why level 3 processing is so important if you accept commercial cards from your clients.

Interchange for accepting a commercial card is either 1.90% or 2.70%, a difference of 80 basis points, before your processor applies their processing fee/markup.


Why hasn’t anyone ever told me about this?

One reason you may not have heard about this, processors receiving no revenue whatsoever from interchange. They earn no more or less by offering level 3 processing to a client. Since this involves the interchange portion of your fees (not a processors rate), it could be that some processors, do not have a genuine knowledge of level 3 processing and or its requirements.

The payments industry is one of the only financial services fields, where someone does not need a certificate or required knowledge or skill to enter. Commercial cards are the only cards you accept that have these various interchange tiers, with the complexity around interchange as it relates to commercial cards, some processors may not have the requirement knowledge to ensure your account is set up in the most economical manner and all requirements are met.


Qualifying for Level 3 Interchange Rates

Most business (except restaurants and some travel & entertainment, T&E business) are eligible for level 3 interchange rates; however you will need payment technology capable of capturing the additional level 3 line item requirements. Credit card terminals Do Not support level 3 line item detail. Your processor should be able to assist in choosing a level 3 capable payment gateway.

Bottom line, Level 3 Credit Card Processing Lowers Processing Rates, if you accept commercial cards without level 3 detail, your losing roughly 1% of potential revenue, regardless of how low your processors rate is.

Your Next Step? If your current processor is not familiar with level 3 processing or has little experience, align your business with a processor who is, and start realizing the new (interchange) revenue level 3 processing will generate.

Questions? Give us a call 888 790 3450

 Level 3 Credit Card Processing Lowers Processing Rates.  Don’t Leave Money on the Table!

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