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What is level 3 processing

If you receive credit card payments from the government or other businesses, you need to have an understanding of level-3 processing.

 

You could be leaving money on the table amounting to hundreds/thousands of dollars per month.

 

What is Level 3 Processing?

Level 3 processing is additional information that is passed along with a payment transaction.  It’s referred to as line item detail and is information you would generally find on an email. Product description, quantity, tax detail etc.  For a full list of level 3 requirements email me at sean@revolution-payments.com or view our site at www.revolution-payments.com under Level 3 payment solutions.

 

When line item detail is provided merchants can save $50-$100 for every $1,000 processed.  If you see Non-qualified on your statement the savings could be much higher than this.

 

Why do Level 3 transactions have lower interchange rates?

The line item detail being entered with the payment transaction actually shows up on the consumer’s bank statement.  Some employers will issue corporate or purchasing cards to employees.  The additional line item detail allows employers to better track what’s being spent on company credit cards.  Employers can also as well as putting restrictions on where the cards can be used.

 

Because of this additional information Visa and MasterCard provide lower interchange rates for merchants who pass level 3 data.

 

If your processing transactions $6,980 you can take advantage of High Ticket Interchange. This starts at 1.45% and goes down to a half% based on the ticket size of the transaction.

 

Keep in mind. Just because your passing level 3 data does not mean you’re necessarily set up properly to receive the reduced interchange levels for level 3.

 

Probably at least half of the merchants I speak with who are processing level 3 are sending level 3 data, but not setup correctly to receive the lower interchange rates for sending level 3 data.

 

Receiving Level-3 interchange requires a cost + merchant account, proper payment technology and other factors.  This is why its recommended to consult with an experienced B2B payment processor.

 

If your currently processing Business-to-Business and Business-to-Government and your current processor has not suggested level 3 processing its probably a very wise decision to consult with an experienced B2B payment specialist for a second opinion.

 

Level 3 processing is often overlooked when merchants are evaluating payment processors. This is a big mistake; the ONLY way for a merchant to receive level 3 interchange is if you’re passing level 3 data with the payment transactions.

 

It doesn’t matter what your current rate, or your processor, if you’re not passing level 3 data your leaving money on the table.

 

Many people don’t realize, that no matter the processor interchange/cost is the same.  This is called interchange and the amount of the sale that goes back to the card-issuing bank.

 

Visa and MasterCard have different rates for each type of card, how the card is processed etc.

 

Corporate, Business, Purchasing and GSA cards are unique because they have different rates based on additional information being passed along with the transaction. Level 1, Level 2 and Level 3.  To receive the lowest rate for Business-to-Business and Business-to-Government you need to pass level 3 data.

 

If you have any questions or would like to discuss level 3 in more detail or learn about the potential savings level 3 would provide your company we would love to hear from you.
Email info@ revolution-payments.com or call 888-790-3450
Fax your last months processing statement to 301 790 1998 for a complimentary level 3 and cost + comparison.