What is Level III Advantage?
Level III Advantage is a powerful solution designed to optimize B2B & B2G interchange rates, enabling businesses to minimize transaction costs and mitigate the risk associated with credit card transactions.
What is an Interchange Rate?
An interchange rate is a fee that a merchant must pay to a credit or debit card network when a customer makes a purchase with their card. The fee is charged by banks to cover the costs of processing the transaction, including the credit risk of the customer defaulting on their payment. Interchange rates are set by card networks, such as Visa, Mastercard, American Express, and Discover.
Interchange rates, set by major credit card companies such as MasterCard and Visa can significantly impact a merchant’s expenses. By leveraging Level II and Level III data in their transactions, businesses can secure lower costs, avoiding standard rates and transaction downgrades.
Factors that Affect Interchange Rates
Level III Advantage Key Benefits
Cost Savings
By including detailed transaction information through Level III Advantage, businesses can qualify for lower interchange rates, reducing their processing expenses (bin lookup for company cards to not overcharge). This translates to increased profitability and improved bottom line.
Risk Mitigation
Level III Advantage empowers merchants to mitigate risks associated with credit and debit card transactions. By complying with the requirements of Level II and Level III data submission, businesses enhance transaction security and reduce exposure to potential losses.
Competitive Advantage
Utilizing Level III Advantage enables businesses to outperform competitors by securing optimized interchange rates. This competitive edge allows merchants to offer better pricing to customers, attract new business partners, and foster relationships with large corporations.
Level III Processing via the Virtual Terminal
Overview
Level III Advantage will automatically detect a business card entered in the Virtual Terminal, prompting the gateway to believe the merchant will benefit from sending additional data (Level III data) to the processor to improve transaction rates. Merchants do have the option to opt out of sending Level III data to the processor and they have the option to still send the Level III data to the processor on transactions that Level III Advantage does not detect as a business card, when they see fit.
How does Level III Advantage work in the Virtual Terminal?
Scenario One
By including detailed transaction information through Level III Advantage, businesses can qualify for lower interchange rates, reducing their processing expenses (bin lookup for company cards to not overcharge). This translates to increased profitability and improved bottom line.
Scenario Two
Level III Advantage empowers merchants to mitigate risks associated with credit and debit card transactions. By complying with the requirements of Level II and Level III data submission, businesses enhance transaction security and reduce exposure to potential losses.
Merchants have full control
When the gateway detects Level III is not expected to improve rates – Merchants will still have an option to opt in to sending Level III data to the processor at their own discretion.
- The merchant will check the “Send Level III data to the processor” box, which will allow the merchant to enter the level III data even if the tool detects a standard customer card entered.
- The level III data fields will be editable, as seen in the image below.
- The merchant in this scenario will pay a gateway fee since Level III data was used and sent to the processor.
Level III Transaction Receipts
Level III data can be viewed in Transaction Receipts under Additional Information → Show More.
Enabling the Service | Partner Portal
Log in to your Partner Portal and head over to List Accounts → scroll to the merchants name from the list or search their name in the search box → click on their name → scroll down to the Value-added Services section → on the right side, click on the Update Services button → select the Status to ‘Active’, ‘Not Offered’, or ‘Free Trial’ → click on Submit. .
If a merchant does not have an active compatible processor for Level III data, you will be prevented from enabling Level III Advantage on that merchant account and you will see that the value-added service only has the “Not Offered” option.
Partners can Mass Enable Level III Advantage.
If you do not have Level III Advantage added as a Value-added Services and you would like to have it added to be able to resell it to your merchants, please email sales@cobalt.info and request Level III Advantage to be added to your account. Please provide your Account ID, which is located on the top right corner when you log in, with your request.
Level III Supported Processors
For a list of supported processors, log in to your partner portal, and head over to the left side panel. At the bottom, under ‘Help’, click on ‘Processor Matrix’. Supported processors will have a green check mark under the Level III column.
Level III in Recurring Subscriptions
Level III data can be added to Recurring Subscriptions in the “Add Subscription” page, allowing merchants to save additional Level III fields to their recurring customers and get better interchange rates when we send it to the processor.
Automatic Level III
Automatic Level III allows merchants using the Level III Advantage service to set up Level III data that will automatically apply to all transactions on their account and does not require the merchant’s software (NMI-made or from third parties) to support Level III. Please see Automatic Level III Merchant Template for more information.
Partners also have the option to automatically add their own Level III template data to a merchant’s transactions by enabling the feature within the merchants Advanced Merchant Features section. The flag is called “Automatically add my Level III template data to the merchant’s credit card transactions”. Please see Automatic Level III Partner Template for more information.
Automatic Level III will add data to all transactions and will allow the gateway to send the data to a processor if:
- The Account has the Level III Advantage service enabled AND;
- The Processor has to support Level III data
