Level I, Level II, Level III Credit Card Processing defines the different interchange categories/qualification for B2B and B2G credit card transactions.
Level 3 credit card processing is a different way of processing credit cards accepted from other businesses and government. When properly set up level 3 credit card processing can lower the cost of accepting B2B and B2G credit card transactions by up to 40% before your processor ads their fee.
One that to remember with Level I, Level II, Level III Credit Card Processing is that interchange is the same regardless of the processor however, when it comes to commercial, business, fleet, purchase, and government cards interchange rates can fall into 1 of 4 different buckets.
- Level 1
- Level 2
- Level 3
- Large Ticket
The differentiating factor between level 1-3 is the additional payment detail included with a transaction. When level 3 detail is provided and the transaction is above a certain amount (Large Ticket), the transaction is eligible for additional interchange savings
Level I Credit Card Processing
Level I processing usually refers to transactions that are done between businesses and consumers and includes basic payment details with the least amount of information.
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Merchant Name
- Transaction Amount
- Transaction Date
Level II Credit Card Processing
Level II processing information is similar to level I but with some additional details. Level II processing can help your business reduce the interchange cost by about .50% on certain card types. Tax exempt transactions are not eligible for the level II savings. There must be a tax amount between 0.1% and 30% for MasterCard and 0.1%-22% for Visa
- Merchant Name
- Transaction Amount
- Tax Amount (Between 0.1%- 31% for MC and 0.1-22% for Visa
- Customer Code or PO number
- Transaction Date
- Merchant Zip Code
Level III Credit Card Processing
In order to qualify for Level III interchange rates, you must the information included for level I and Level II. In addition to those fields you will need the additional fields listed below.
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Merchant Name
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Transaction Amount
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Transaction Date
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Customer Code
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Ship From Postal Code
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Destination Postal Code
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invoice Number
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Order Number
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Freight Amount
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Line Item Detail of Purchase
Qualifying for level III interchange rates requires a more sophisticated technology that can capture what Visa and MasterCard refer to as line item detail.
this is information that would generally be found on an invoice that is included processing a credit card.
In order to qualify for level III interchange rates you will need a cost plus merchant account and virtual terminal capable of the additional line item detail Visa and MC require. In the past credit card terminals did not cut it. They do not support the additional detail required to receive level 3 interchange rates.
This was before Revolution Payments free optimization service that runs behind the scenes to qualify every transaction at the lowest possible interchange rates.
FYI, if you process authorizations the transaction must be settled within 2 days otherwise it will not qualify for level III interchange
Large Ticket Processing!
Visa Commercial Product Large Ticket
Large ticket processing is an additional way to lower the interchange costs of accepting B2B and B2G credit cards however, ONLY transactions including level 3 detail are eligible, otherwise you end up paying 2.70-3%+ for the same transaction.
Visa- Purchasing Card-Non GSA / Corporate
transaction greater than or equal to $7,755.56
Visa Purchasing Card-Non GSA Prepaid transaction
greater than or equal to $2,908.00
Visa GSA Purchase Card-Transaction must be greater than $5,557.14.
Not Eligible: Travel and Entertainment – Airlines/Passenger Transport (MCC 3000-3299, 4511), Car Rentals/Auto Rental (MCC 3351-3500, 7512), Hotels/Lodging (MCC 3501-4010,
7011), Passenger Railways (MCC 4112), Cruise Lines (MCC 4411), Travel Agents (MCC 4722) Restaurants (MCC 5812, 5814), High Risk Direct Marketing (MCC 5962, 5966, 5967), and
Truck and Utility Trailer Rentals (MCC 7513).
MasterCard
Transaction amount must be $10,000.00 or
greater.
Not Eligible: Travel and Entertainment – Airlines/Passenger Transport (MCC 3000-3299, 4511), Car Rentals/Auto Rental (MCC 3351-3500, 7512, 7513, 7519), Hotels/Lodging
(MCC 3501-3999, 7011), Passenger Railways (MCC 4112), and Restaurants (MCC 5812).
Do you have questions about Level I, Level II, Level III Credit Card Processing or would like a no obligation level 3 analysis and audit give us a call at 888 790 3450 or email info@ revolution-payments.com. We have been the experts at level III processing and providing these savings to our clients for over 15 years.