Frequently Asked Questions:
- What is Level 3 processing, and how does it benefit my business?
- Which types of cards are eligible for Level 3 processing?
- What information do I need to provide for Level 3 processing?
- How can I ensure that I’m set up for Level 3 processing?
- Will I be charged extra fees for Level 3 processing?
- What should I look for in a payment processor for Level 3 processing?
Merchants who accept corporate or government credit cards may be able to benefit from Level 3 credit card processing. This type of processing requires merchants to provide enhanced data for transactions that qualify for Level 3 interchange rates. In this article, we’ll cover everything merchants need to know about Level 3 credit card processing requirements, including what it is, the benefits, the required data, and how to choose the best payment processor for Level 3 processing.
What is Level 3 Credit Card Processing?
Level 3 credit card processing is a type of transaction processing that requires merchants to provide more detailed information about each transaction, beyond what is required for consumer transactions. The additional data is used to determine the level of interchange rate that applies to the transaction. Generally, Level 3 transactions are reserved for business-to-business (B2B) and business-to-government (B2G) transactions, which typically involve larger transaction amounts.
Benefits of Level 3 Credit Card Processing
The main benefit of Level 3 credit card processing is lower processing fees for qualifying transactions. These lower fees can result in significant savings for merchants who accept a large number of corporate or government credit cards. In addition to cost savings, Level 3 processing can also provide merchants with additional income, as the enhanced data required for Level 3 processing can help streamline accounting processes and reduce the risk of chargebacks.
Level 3 Credit Card Processing Requirements
In order to qualify for Level 3 credit card processing rates, merchants must provide specific line item details at the time of a purchasing card or government card transaction. This information goes beyond what is required for Level 1 and Level 2 transactions, which are more commonly used for consumer transactions. The required information for Level 3 transactions includes:
- Product or service description
- Product or service quantity
- Product or service unit of measure
- Product or service extended amount
- Discount amount
- Shipping amount
- Duty amount
- Tax amount
- Tax rate
While it may seem like a lot of information, some solutions can automate the process of sending Level 3 data. This means that merchants won’t need to manually enter the details when they process a transaction. It’s important to note that not all credit cards are eligible for Level 3 processing. While many corporate and government credit cards are eligible, some business credit cards may not be. Merchants should confirm with their payment processor which cards are eligible and ensure that all required data is provided for Level 3 transactions.
Choosing the Right Payment Processor for Level 3 Processing
When choosing a payment processor for Level 3 credit card processing, merchants should look for a processor that is knowledgeable about Level 3 requirements and compliance. Compliance is a critical part of Level 3 processing because providing the required data can be a complex and constantly changing process. Merchants need a payment processor who is familiar with the specific requirements for their business and who can help them stay up to date on any changes that may affect their Level 3 compliance.
In addition to compliance, merchants should also consider the payment processor’s experience with Level 3 processing, including the ability to support Level 3 transactions and provide the best possible interchange rate. Merchants should also look for a payment processor that offers reliable customer support, easy integration with existing systems, and competitive pricing.
Level 3 credit card processing can provide significant cost savings and additional income for merchants who accept corporate or government credit cards. To qualify for Level 3 processing rates, merchants must provide detailed information about each transaction, which requires a payment processor that is knowledgeable about Level 3 requirements and compliance. Merchants should choose a payment processor that has experience with Level 3 processing, provides reliable customer support, and offers competitive pricing.