Having a few years of experience in business can really bring out the best of you, you are faced with many money-saving tricks you weren’t aware of initially. Level 3 credit card processing is a hidden gem for saving, but you don’t need to be a long-time player in the industry to benefit from it.
Now, you might be curious about what Level 3 data in credit card transactions means and if it’s as complex as it sounds. In this article, we will circle around this subject to understand its true meaning, how you can benefit from it, the requirements to be eligible for it and much more! So keep on reading.
Understanding Level 3 Data
Level 2 credit card processing is designed for the business-to-business (B2B) model with more detailed transactions. This type of credit card processing that accepts detailed transaction information with every sale is required by many government offices and businesses. Level 2 data provided with a sale also allows for lower interchange rates because MasterCard and Visa recognize that such transactions with additional information are more likely to be legitimate.
Level 3 data takes this to the next level. If you accept a great deal of government-issued cards or process a lot of transactions in the B2B industry, Level 3 data acceptance can reduce your interchange rates even further with savings of up to 1.00% compared to standard interchange rates.
Advantages of Level 3 Data
Level 3 credit card processing can be a game-changer for businesses aiming to reduce credit card fees. But the perks don’t stop there; it’s also a win for your customers.
This is particularly beneficial for big entities like government bodies and large companies. With Level 3, they can keep a tight rein on expenses, making their financial tracking super detailed. Plus, it gives them more control over how their employees use company credit cards, making misuse harder.
Here are the top three perks of Level 3 processing for businesses:
- Lower Fees: Thanks to fewer fraud cases in Level 3 transactions, credit card companies often offer reduced processing rates compared to Levels 1 and 2.
- Quicker Payments: Level 3 transactions usually get processed faster than lower-level ones, which is great news if you’re concerned about cash flow.
- More Sales Opportunities: Some big organizations only deal with Level 3 transactions. This opens the door to a broader customer base, potentially boosting revenue.
When To Opt For Level 3 Processing?
Level 3 data asks for more detailed transaction info compared to Level 2. Plus, you’ll need a specific gateway that can handle Level 3 credit card processing. Because of this, not every business will benefit from Level 3 credit card processing. If you mostly deal with regular customer cards and only occasionally handle business or government cards, Level 3 might not be necessary for you. For businesses with rare business card transactions, the time and cost to get a Level 3 system might not make sense.
On the other hand, if you frequently take business or government cards, especially for big sales, Level 3 could save you money. The difference in fees between Levels 2 and 3 can be significant, especially on larger sales, especially in the cases of:
- B2B Sellers: Businesses that sell to other businesses often go for Level III processing, especially if they have big or repeat sales.
- Wholesale Suppliers: Those who supply products to other businesses also benefit from Level III, cutting down on credit card fees.
- Manufacturers: Companies making goods for other businesses use Level III to make buying and selling more efficient and cost-effective.
- Corporate Buyers: Big companies use Level III for their buying departments to better manage and keep track of expenses.
All in all, if you belong to one of these business categories with high sales volume, Level 3 can save you tons of money in transactions.
What Are The Requirements For Level 3 Data?
Host Merchant Services offers level 3 credit card processing, a service that only some gateways can accommodate. To qualify for level 3, you will need to input the following data fields for every transaction. The good news is your gateway can be set up to automatically pass this data along with the transaction.
- Merchant name
- Transaction amount
- Tax amount
- Date of transaction
- Merchant zip code
- Customer code
- Ship from and destination zip code
- Order number and invoice number
- Item product code and commodity code
- Item quantity and description
- Freight amount and duty amount
MasterCard Level 2 and 3 Rates
Level 2 and 3 card processing can help you access significantly lower rates, depending on the type of card you accept. If you accept large, level 3-eligible transactions, there is a good chance that even one large sale will quickly exceed the additional cost of level 3 processing.
While there are hundreds of underlying interchange rates and many are eligible for level 2/3 data rates, some are not. Below are the most common transaction types eligible for rate reductions with level 2 and level 3 processing.
MasterCard Data Rate 1
- Standard Rate: 2.65% + $0.10/transaction
- Level 2 Rate: 2.00% + $0.10/transaction
- Level 3 Rate: 1.75% + $0.10/transaction
MasterCard Data Rate 2
- Standard Rate: 2.81% + $0.10/transaction
- Level 2 Rate: 2.16% + $0.10/transaction
- Level 3 Rate: 1.91% + $0.10/transaction
MasterCard Data Rate 3
- Standard Rate: 2.86% + $0.10/transaction
- Level 2 Rate: 2.21% + $0.10/transaction
- Level 3 Rate: 1.96% + $0.10/transaction
MasterCard Data Rate 4
- Standard Rate: 2.96% + $0.10/transaction
- Level 2 Rate: 2.31% + $0.10/transaction
- Level 3 Rate: 2.06% + $0.10/transaction
MasterCard Business Debit/Prepaid
- Standard Rate: 2.65% + $0.10/transaction
- Level 2 Rate: 2.20% + $0.10/transaction
- Level 3 Rate: 1.80% + $0.10/transaction
Visa Level 2 and 3 Rates
Visa Business Retail Card
- Standard Rate: 2.20% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
Visa Business Card Not Present
- Standard Rate: 2.25% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
Visa Commercial Card Not Present
- Standard Rate: 2.65% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
Visa Commercial Card Present
- Standard Rate: 2.50% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
You can trust Host Merchant Services to ensure your account is set up for level 3 acceptance to help you access these lower rates with B2B and government transactions. Ready to enjoy lower costs today? At Host Merchant Services, we take pride in offering free equipment with no hidden costs and the lowest rate guarantee. Call us today at 877-517-HOST(4678) to set up level 3 data acceptance with your NMI gateway for a low monthly cost.
How Can You Access Level 3 Data?
Cards are just one part of the equation for Level 3 data; gateways are crucial too. If your gateway can’t handle Level 3 data, even if you provide all the necessary details, the transactions won’t qualify for Level 3 because the data doesn’t get included with the transaction.
The gateway type matters less if the business cards you take can only qualify for Level 2. Most gateways can manage Level 2 data. But since you can’t tell just by looking at a card if it’s Level 2 or 3, it’s smart to pick a gateway ready for Level 3 if you deal with many business, corporate, or government cards. Remember, regular card machines at the checkout don’t support Level 3 data. You’ll need a combination of a gateway and a virtual terminal to get there. Ensure your processor sets things up right for Level 3 data, and double-check once you start processing.
Best Gateways Which Can Handle Level 3 Data
To handle Level 3 data, you’ll need a special payment gateway. However not all merchant service providers offer this feature. Here are some top providers recommended by professionals that support Level 3 processing:
- PayTrace: This is a versatile gateway used by many processing companies. With PayTrace, you can instantly check if a card is Level 3 eligible. You can let PayTrace auto-fill details or input Level 3 data yourself.
- Payment Depot: This membership service gives you better rates when you process more transactions. It teams up with PayTrace for Level 3 data, making data entry easier.
- MX Merchant: This gateway pairs with the MX Merchant virtual terminal. Remember that you’ll need both for it to work smoothly. The virtual terminal handles your payments while the app works quietly in the background, even auto-filling info for you.
- Dharma Merchant Services: They offer competitive rates with a clear pricing model. For just $20 a month, you can use their B2B app, which works with the MX Merchant system for Level 3 processing.
- CardPointe: From CardConnect, this gateway integrates well with processing firms that partner with CardConnect. You can set it up to automatically fill in Level 3 data, making transactions smoother.
- Stax: Another membership-based option that offers discounts based on your transaction volume. They have a Virtual Terminal Plus feature set up for Level 3 processing.
Choose a provider that best fits your business needs and can support Level 3 processing.
Things To Consider Before Opting For Level 3 Data
Using Level 3 can cut down your card-related costs. But just sending Level 3 details doesn’t guarantee you those better rates. Both Visa and Mastercard have specific rules. If you break them, you might lose the Level 3 rates, but your transaction could also get bumped down to a standard rate. Here’s what could make you miss out:
- If you okay a transaction for more money than the original approved amount.
- Not finalizing a transaction within 48 hours.
- Skipping the zip code info can be a problem too.
So, it’s super important to follow these rules to get those Level 3 savings. Double-check with your payment processor to ensure you’re on a cost-plus plan. And always make sure all the transaction details are spot on. Doing this can save your business money in the long haul.
MasterCard Level 2 and 3 Rates
Level 2 and 3 card processing can help you access significantly lower rates, depending on the type of card you accept. If you accept large, level 3-eligible transactions, there is a good chance that even one large sale will quickly exceed the additional cost of level 3 processing.
While hundreds of underlying interchange rates exist, and many are eligible for level 2/3 data rates, some are not. Below are the most common transaction types eligible for rate reductions with level 2 and level 3 processing.
MasterCard Data Rate 1
- Standard Rate: 2.65% + $0.10/transaction
- Level 2 Rate: 2.00% + $0.10/transaction
- Level 3 Rate: 1.75% + $0.10/transaction
MasterCard Data Rate 2
- Standard Rate: 2.81% + $0.10/transaction
- Level 2 Rate: 2.16% + $0.10/transaction
- Level 3 Rate: 1.91% + $0.10/transaction
MasterCard Data Rate 3
- Standard Rate: 2.86% + $0.10/transaction
- Level 2 Rate: 2.21% + $0.10/transaction
- Level 3 Rate: 1.96% + $0.10/transaction
MasterCard Data Rate 4
- Standard Rate: 2.96% + $0.10/transaction
- Level 2 Rate: 2.31% + $0.10/transaction
- Level 3 Rate: 2.06% + $0.10/transaction
MasterCard Business Debit/Prepaid
- Standard Rate: 2.65% + $0.10/transaction
- Level 2 Rate: 2.20% + $0.10/transaction
- Level 3 Rate: 1.80% + $0.10/transaction
Mastercard expects businesses to handle $20,000 to $1 million in transactions with Mastercard or Maestro each year. Alternatively, businesses can meet the Level 3 standards set by Visa. Additionally, Mastercard mandates a yearly self-check, an online review, and four network scans every year by a certified vendor.
Visa Level 2 and 3 Rates
Visa Business Retail Card
- Standard Rate: 2.20% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
Visa Business Card Not Present
- Standard Rate: 2.25% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
Visa Commercial Card Not Present
- Standard Rate: 2.65% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
Visa Commercial Card Present
- Standard Rate: 2.50% + $0.10/transaction
- Level 2 Rate: 2.05% + $0.10/transaction
- Level 3 Rate: 1.85% + $0.10/transaction
To be eligible for Level 3 processing through Visa, your business should handle between 20,000 and 1 million online transactions with Visa each year. Visa asks for an AOC form, an SAQ, and four network scans done by a certified vendor, all yearly. Plus, Visa offers reduced interchange rates for businesses using Level 3 data.
You can trust Host Merchant Services to ensure your account is set up for level 3 acceptance to help you access these lower rates with B2B and government transactions. Ready to enjoy lower costs today? At Host Merchant Services, we offer free equipment with no hidden costs and a lowest rate guarantee. Call us at 877-517-HOST(4678) to set up level 3 data acceptance with your NMI gateway for a low monthly cost.
Why Should Your Business Use Level 3 Data?
You want to save money, work efficiently, and keep things secure when handling payments. Level 3 processing helps by cutting fees and providing more transaction details. While it might seem complex to set up, there are ways to simplify it, like storing customer info for future buys. Plus, big payment companies offer tools that work well with all major systems.
Level 3 is also cost-effective for businesses compared to Levels 1 and 2. The extra transaction info helps merchants track sales better, making reporting and managing purchases easier and more effective.
Conclusion
Level 3 data in credit card transactions offers a specialized approach for businesses, especially those involved in B2B transactions. It provides detailed transaction information, reducing fees and enhancing security measures.
While not suitable for every business, those frequently dealing with large sales, government, or corporate transactions stand to benefit the most. By understanding its requirements and leveraging compatible gateways, businesses can streamline their payment processes, optimize financial tracking, and ultimately achieve significant cost savings.
