Does my business qualify for Level 2 data in credit card processing?
Do you process business to business (B2B) transactions? Are you a business-to-government (B2G) company? If so, you may qualify for discounted Level 2 data or level 3 data credit card processing! Businesses that accept payments via business, corporate, purchasing, or government cards are eligible for this program.
How does Level 2 & 3 Credit Card Processing work?
To qualify for Level 2 or Level 3 discounts, you must provide additional data with each transaction. The higher the processing level, the more data that is required.
By sharing additional data points, card issuers such as Visa, Mastercard, and Discover will discount your interchange rate for that transaction. Card issuers incentivize this data collection because it helps qualify the transaction and significantly reduces the likelihood of fraud. The card issuers also benefit by gaining important insights into the cardholder’s purchase patterns. The highest levels of data collection are often required by government entities or large corporations to help with tracking and auditing.
Understanding the Credit Card Processing Data Levels:
When you process a credit card transaction, it can be classified into one of three levels based upon data requirements set by the card issuer. These levels are:
Level 1 Data: Level 1 transactions include standard business-to-consumer credit card data that is passed to the credit card processor such as the amount, card number, and expiration date.
Level 2 Data: Level 2 data includes the level 1 data as well as the tax amount, the merchant’s postal code, and customer code. By providing this additional data, you will earn a discount on that transaction.
Below is an example of the data fields collected for a Level 2 Transaction:
- All data from Level 1 (The amount, card number, and expiration date)
- Sales tax indicator and amount
- Merchant tax ID
- Merchant postal code
- Invoice number
- Order number
- Customer code/PO number
Level 3 Data: This is the highest processing level for data collection. To qualify for a Level 3 transaction, you must collect line-item details such as product descriptions, order numbers, invoice number, item codes, and descriptions.
Below is an example of a Level 3 Data Transaction:
- All data from Level 1 and 2
- Product description
- Product code
- Unit price, unit of measure, unit quantity
- Discounts applied and line-item total
- Debit/credit indicator
- Freight and/or shipping cost
- Duty and/or import taxes assessed
Additionally, there are other processing requirements that are required to qualify for these discounts, including volume requirements set forth by Visa and Mastercard.
However, with our payment gateway solution, we can compliantly add invoice data! This way your payments can automatically qualify for Level 2 or 3 data levels without having to process over 1 million annual transactions.
Take your Business to the Next Level with Gulf Management Systems at your side!
Why Level 2 & Level 3 Card Processing?
- Save Money on your B2B Transactions: Although the percentages might seem insignificant by themselves, they could save you a large amount of money in the long run. Discounts up to 0.75% add up over time and could save you hundreds of dollars each month in processing costs! Lowering your processing fees is an easy way to cut business costs.
- Improve your Reporting and Tracking: Level 2 and Level 3 Card processing also help businesses by providing valuable data that can be used to improve your business reporting, management, and tracking.
- Prevent Fraudulent Transactions: When submitting a level 2 or level 3 transaction there is also greater security and fraud prevention. Considering high fraud rates, this is highly beneficial.
