Double You’re Profit Margins By Accepting Credit Cards from other Businesses or Government Correctly!
Did you know, more than 15 years ago Visa and MasterCard created special interchange rates for level 3 processing?
Level 3 processing was initially created for government vendors and Purchase cards, but now, non-government, commercial, corporate, business (MasterCard), Fleet and purchase cards are eligible.
In fact, here is the exact verbiage taken from the GSA site.
Value Proposition for Vendors:
• Savings – MasterCard and Visa have created special rates to support Purchase Card programs reducing the merchant transaction costs (Interchange) if Level-3 line item detail information is transmitted with the card payment file. By providing Level-3 data, a supplier may reduce their credit card processing fees – often by 30% to 40%.
- Example #1, Visa Interchange Exercise:
Cost for a $5000 Visa transaction without Level 3 Data: $139 or 2.78%
Cost for a $5000 Visa transaction with Level 3 Data: $99 or 1.98%
Cost for a $3000 Visa transaction without Level 3 Data: $99 or 3.30%
Cost for a $3000 Visa transaction with Level 3 Data: $75 or 2.50%
- Example #2, MasterCard Interchange Exercise:
Cost for a $5000 MasterCard transaction without Level 3 Data: $147.50, or 2.95%
Cost for a $5000 MasterCard transaction with Level 3 Data: $102.50, or 2.05%
Cost for a $3000 MasterCard transaction without Level 3 Data: $88.60, or 2.95%
Cost for a $3000 MasterCard transaction with Level 3 Data: 77.58%, or 2.58%
GSA Federal Acquisition Service 2200 Crystal Drive Arlington, VA 20406-0003 www.gsa.gov
Unfortunately 3 out of 5 vendors are still not set up to take advantage of this
These special interchange rates lower your transaction cost by up to 40%, if level III line item detail is included with your transaction (also applies to non-government commercial cards)As you probably know, Interchange fees are Non Negotiable (the same for all processors) and paid or collected by the card-issuing banks that provide Visa, MasterCard, Not Your Processor!
This is another reason banks issue credit cards, they receive the bulk of the fees a business pays to accept cards.
Each time a transaction is processed, it is assigned an interchange category that determines the interchange rate. Higher interchange rates are applied to transactions that Do Not not include Level 3 detail.
You can see these by googling Visa interchange rates, page 13
- Commercial Level III 1.90% + $0.10
• Commercial Card Not Present 2.70% + $0.10
You’re either paying an interchange charge of 1.90% or 2.7% before your processor adds their fee.
You can see how the special interchange rates for level 3 processing can/will affect your bottom line (if your set up properly)
Keep in mind for your business to benefit from Level II and Level III interchange optimization, your business needs to process transactions through a third-party gateway that supports Level II and Level III processing.
It is important to note that there are platform-specific requirements to qualify for level 3 interchange rates.
- The card accepted must be business, corporate purchasing cards
- Line item detail must be passed for every transaction
- Merchant must process transactions via a third-party gateway that supports Level III processing
Revolution Payments helps businesses meet the requirements for processing and capturing level III line item detail
Revolution Payments offers is a proprietary payment solution, and here’s how it works: For all credit card transactions … whether processed online or entered manually on your PC or mobile … our system automatically attaches details to every transaction that update all your credit card orders to Level 3 interchange rates.
This increases your profit margins by a minimum of 1% on your existing sales volumes!
How much will the special interchange rates for level 3 processing impact your bottom line? Find out today!
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Questions? Give us a call at 888 790 3450 or email info@ revolution-payments.com