Electronic Commerce International
Level 2 & Level 3 Processing
Electronic Commerce International is a leader in the B2B (business to business) and B2G (business 2 government) payment industry.
What is Level 3 Processing?
Level 3 Processing was created to prevent excess government spending, but can now be used by businesses that accept commercial, B2B, and government transactions to lower interchange costs of accepting these cards.
Visa and MasterCard created special interchange rates to support purchase card programs and level 3 processing, reducing a merchant’s transactions cost (interchange) when level 3 line item detail is provided with a transaction.
Level 3 processing is designed for B2B & B2G credit card transactions and requires the capture of line item detail – information you’d typically find on an invoice. Level 3 line item detail can equate to more than 11 different line items and include; PO#, unit-of-measure, and sales tax information (when applicable), description of the product, and quantity.
Electronic Commerce International is a leader in the B2B (Business 2 Business) and B2G (Business 2 Government) payment industry.
Data Processing Levels
If terminology like “data processing levels” sounds like a foreign language to you, know that you’re not alone. Here’s a quick breakdown of each data level, as well as what the data you need to provide for your credit card company to qualify for each tier.
Level 1
All B2B transactions must qualify for a minimum of Level 1 data processing. Luckily, the data you need to provide to qualify for Level 1 processing is limited to:
- the merchant’s name
- the transaction amount
- the date on which the transaction took place
Level 2
This level is perfect if you deal with small to mid-sized businesses. The data you need to provide to qualify for Level 2 processing is a bit more extensive. You will need to provide your credit card company with:
- all level 1 data requirements
- the customer code
- the total tax amount
Level 3
Level 3 data processing is ideal for companies that do business with large corporations or government entities––in fact, this tier of payment processing was originally created to prevent branches of the government from overspending.
To qualify for Level 3 you need to provide:
- all of the data necessary for Level 1 and Level 2
- the postal code your company is shipping from
- the postal code your company is shipping to
- the invoice & order number
- the freight amount
- the line item details of the purchase
To achieve level 3 data processing, you need to access and report a lot more data than when processing Level 1 or Level 2 transactions. Yet since higher data levels have lower interchange rates, it is worth your time to learn to qualify for Level 3 processing–– especially if your company does a lot of B2B transactions with large syndicates, or if you aspire to start doing business with the big guys, many of which only use Level 3 cards for major purchases.
Join Thousands of Satisfied Merchants
Preparing Your Business for Level 3 Processing
Lower interchange costs
This is the most obvious reason to strive to qualify for Level 3 processing, but they aren’t the only benefit.
More control over your business
Track things like the size of each purchase, who is allowed to process transactions and how often your card can be used.
Transaction Notifications
Be notified of any changes or suspicious-looking transactions.
Processed Faster
Less of a time delay between when you make a sale and when you get paid – this is a major incentive for businesses that don’t have a lot of excess revenue floating around.
However, extra data isn’t the only thing you need in order to qualify your businesses for Level 3 processing. You also need a payment gateway to authorize online transactions, as well as a card that’s actually eligible for Level 3 data processing.
To achieve level 3 data processing, you need to access and report a lot more data than when processing Level 1 or Level 2 transactions. Yet since higher data levels have lower interchange rates, it is worth your time to learn to qualify for Level 3 processing–– especially if your company does a lot of B2B transactions with large syndicates, or if you aspire to start doing business with the big guys, many of which only use Level 3 cards for major purchases.
If you still aren’t sure if your transactions would qualify for Level 3 processing rates, or you want to learn additional ways your business can save money on payment processing, sign up for a free analysis from Electronic Commerce International to learn how you can start saving money on interchange fees today!