I often hear merchants say, “We have a great rate”, “We have the lowest rate” or “No one can beat our rate”. Keep in mind all processors have the same cost. This is called Interchange the actual cost of the sale and what goes back to the card-issuing bank. Now that Visa and MasterCard are public companies and in an effort to put more transparency into the true cost of accepting credit cards they post interchange rates on their site. This levels the playing field and allows you to see what you’re paying compared to actual cost.
One of the Easiest Ways for Businesses to Decrease Costs
Merchants who sell to other businesses or the government should understand the basics of Level 3 Processing.
If you’re not familiar with Level 3 Processing there is a good chance you’re losing a minimum of 1%-2% on many of your Business-to-Business and Business-to-Government Transactions, and something one of our payment professionals at Revolution can easily prove to you.
Receiving so many calls it can be hard to differentiate from one company to the next, the fact you’re selling to other businesses or the government you need to know the basics of Level-3
Commercial, business, purchasing and GSA cards operate much differently than a consumer cards. They carry reporting capabilities, features and control that allow your customers to keep better track of purchases.
Level-3 is often referred to line item detail. Level 3 defines whats being purchased and sends this along with the payment transaction, this transaction detail shows up on your customers bank statement allows them to see a detailed description of purchases rather than showing only the total dollar spent.
Business, Purchasing, Corporate and GSA have the ability to pass Level-1, Level-2 information or Level-3 information with the transaction. MasterCard and Visa ™have created special
rates to support Level -3 by reducing the supplier’s transaction costs if Level-3 line item detail information is transmitted with the financial settlement.
By providing Level-3 data, a supplier may substantially reduce their credit card processing fees – sometimes by up to 40%.
If you’re not processing level-3 data you may be paying 30-40% in additional fees every time you accept a Business, Purchasing, Corporate and GSA card. Many merchants I speak with are under the impression they have the best rate when it comes to accepting credit cards. Level 3 rates for Commercial, Purchasing and GSA vary from 1.80%-1.97% whether the transaction is swiped or keyed. If you’re paying more than this you’re not getting level 3 rates.
Level-3 requires a special payment gateway and your merchant account being setup a specific way. Terminals will Not support Level-3
In addition to the cost savings resulting from providing Level-3 for all transactions, both MasterCard and Visa have
created a special “large-ticket” interchange rates. Visa large ticket starts at $6,980 with a rate of 1.45%. Transactions over $10,000 are only .70 basis points. This goes down as your ticket sizes go up.
Revolution payment systems leading provider and the authority when it comes to Level-3 processing. Allow Revolution Payment Systems the opportunity to present a detailed savings analysis, comparing your rate and fee structure with Revolution’s Level-3 & Interchange pricing. There is no obligation, just good information that will empower your business.
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