Level 3 Credit Card Processing for B2B, Commercial & Government P-cards
Setting up your business to accept government purchasing or commercial cards for payment is different than establishing a standard retail merchant account or internet merchant account.
These cards possess more features, capabilities and controls than other cards. They can be setup to control things like: Where the card may be used based on merchant MCC code (MCC restriction), daily/monthly spend, number of transactions etc. This is referred to as level 3 line item detail.
This in turn helps buying organizations and government manage their purchasing policies and processes.
This is vital knowledge any business selling to the government or other business should know and understand
Each time a business processes a credit card, it pays a fee to the bank that issued the customer’s card (interchange), and to a processor. (processors markup).
Interchange is responsible for 75%-90% of the fees businesses pay to accept credit cards (Not Processors) Interchange fees are nonnegotiable and remain the same regardless of the processor you choose.
Despite the misconception some businesses have been let to believe, no processor can give you a lower rate or better deal on interchange. However, by processing commercial, purchase and government credit card transactions with level 3 payment detail, you can reclaim a large percentage of this interchange revenue to your bottom line.
Level-3 Payment Processing:
Commercial and Government P-cards qualify 1 of 3 ways on an interchange level, Level-1, Level-2 and Level-3. The higher the level, the lower the rate.
To encourage vendor participation, MasterCard and Visa have created special rates to support Purchase Card programs reducing a merchant’s transaction costs (Interchange) if Level-3 line item detail information is processed with the credit card transaction.
As stated on the GSA site, “By providing Level-3 data, a supplier may reduce their credit card processing fees – often by 30% to 40%”
These special rates are intended to be an incentive to pass Level 3 information, yet statistics show us that at least 3 out of 5 vendors have not been set up to accept these cards properly.
Most have been set up to process these transactions as retail transactions, meaning they are not passing level 3 line item detail, not knowing there is a difference or that by doing this is cutting into their profits margins by up to 40%.
Revolution Payments is a leading advocate and Level-3 payment processor to government contractors, and B2B merchants, providing specialized Level 3 technology resources to reduce expenses and take advantage of the reduced level 3 interchange rates for commercial and government P-cards.
Questions? Give us a call 888 790 3450
PS: Accept credit cards over $5984 for individual transactions? If so, ask us about High Ticket Interchange Rates.