Level 2 & Level 3 Processing
Level 3 Processing
1) Level 3 Processing is used in B2B and B2G transactions to help large corporations monitor and track their spending by collecting a set of additional line-item details. Utilizing that extra data, this top tier of processing offers significantly lower interchange rates for Visa and Mastercard transactions.
2) Level 3 processing is utilized in B2B and B2G transactions to help them secure lower interchange rates and monitor their spending. It involves the input of additional data through extra line-item details that further outline transactions for both the business and credit card companies.
3) This additional data is reported back to Visa and Mastercard, allowing businesses to keep track of, receive applicable sales tax detail, and set restrictions on purchases made with a company credit card. This allows any business to better stay on top of their spending, ensuring that their funds are best utilized to further their operations.
Level 3 Data
Most merchants will never have the opportunity to accept Level 3 cards, but if you’re processing in a B2B-heavy industry or if you accept a lot of Government cards, then having Level 3 data acceptance may help reduce your interchange costs significantly. Often times, Level 3 interchange rates are up to a full 1.00% lower than their standard counterparts! But, in order to gain access to Level 3 data, you’ll be required to input a fair amount of information on each transaction. In addition, only certain gateways can accommodate for Level 3 data. Take Charge offers Level 3 support through the MX Merchant interface using the B2B app. MX Merchant will automatically populate all fields required for Level 2, plus the following:
Ship-From Zip Code
Destination Zip Code
Item Product Code
Item Commodity Code
Item Unit of Measure
Item Extended Amount
Level 2 Data
Level 2 credit card processing is similar to Level 3 processing, but with less requirements. Just like with Level 3 data, merchants are required to input additional data fields – but typically, the required fields are easier to enter and there are fewer fields to deal with. Level 2 processing still provides a rate reduction, but not quite as much as level 3 processing.
Processing Level 2 data requires either a standalone credit card terminal, or a gateway like MX Merchant that’s equipped to handle Level 2 data. Common interchange reductions are around 0.50% lower than typical sales! So if you’re a B2B merchant processing large orders, it’s definitely worth your while to input Level 2 data. In order to qualify for Level 2 data, you’ll be required to input the below data fields with each transaction.
Tax Amount (Between 0.1% and 31% of the total amount)
Customer Code or PO number
Merchant Zip Code