How do I get the lowest B2B interchange rates?

There’s a lot that goes into getting low B2B and B2G interchange rates.

Visa/MasterCard set the underlying interchange rates for all credit card transactions. Those rates vary widely, based on a variety of factors beyond the type of card being presented. The type of card is important! But, many other things impact the underlying rate, such as the size of the sale, the time difference between the authorization/capture, data captured with the sale, and more. In particular, MCC codes impact the underlying interchange rates if you’re listed as a “B2B” merchant by Visa – there are about 35 industry types that qualify. Click here to see if your business is considered B2B by Visa. You can also receive lower rates by submitting a tax amount greater than $0 to access level 2 data rates. You can read about tax acceptance, and how it impacts interchange here. No matter what – you’ll always need to submit AVS information and a PO/Invoice number with the transaction. We know this is complicated – that’s why Dharma offers the MX Merchant B2B app to handle all of this in the background, automatically! Read on to see a handy chart about what rates you can expect to pay on business cards.

What Business-card rates can I expect with Visa?

This is a complicated question, since there are many different potential cards you can receive, and many factors that influence interchange. But typically, rate reductions for B2B merchants are in the 0.05% – 0.20% range, all else being equal. As you’ll see in the below chart – it’s incredibly important to always submit AVS information and a PO number. If you’re able to include a tax value above $0, you’ll qualify for level 2/3 rates, which are even lower than B2B rates by themselves. View the below chart to see how Visa business cards will qualify, and click here to see if your business is considered a B2B merchant type by Visa. Remember – if you use a system like the MX Merchant B2B app, you don’t have to worry about any of this! The system will auto-qualify sales on your behalf.

 Visa Qualification —>

Level 3

Level 2

B2B sales

Swipe

Key In

No Tax

Standard

What’s Required?

Level 3 data Level 2 Data

Tax > $0

B2B MCC

Tax = $0

Swipe

Tax = $0

Key-in

Tax = $0

No Tax No AVS

No Tax

Which Rate is the Best?

Best Rates Great Rates Better Rates Good Rates Bad Rates Worse Rates Worst Rates
VISA BUSINESS DEBIT CARD
N/A N/A N/A 1.70% + $0.10 2.45% + $0.15 2.45% + $0.15 2.95% + $0.10
VISA COMMERCIAL PREPAID CARD
N/A N/A N/A 2.15% + $0.10 2.65% + $0.15 2.65% + $0.15 2.95% + $0.10
VISA CORPORATE/PURCHASING/Fleet CARD
1.90% + $0.10 2.05% + $0.10 2.55% + $0.10 2.50% + $0.10 2.65% + $0.10 2.95% + $0.10 2.95% + $0.10
VISA BUSINESS TIER 1 CARD
N/A 2.05% + $0.10 2.10% + $0.10 2.20% + $0.10 2.25% + $0.10 2.40% + $0.10 2.95% + $0.20
VISA BUSINESS TIER 2 CARD
N/A 2.05% + $0.10 2.25% + $0.10 2.30% + $0.10 2.45% + $0.15 2.75% + $0.15 2.95% + $0.20
VISA BUSINESS TIER 3 CARD
N/A 2.05% + $0.10 2.40% + $0.10 2.40% + $0.10 2.60% + $0.20 2.85% + $0.20 2.95% + $0.20
VISA BUSINESS TIER 4 CARD
N/A 2.20% + $0.10 2.50% + $0.10 2.50% + $0.10 2.70% + $0.10 2.95% + $0.10 2.95% + $0.25

What Business-card rates can I expect with MasterCard?

MasterCard works a bit differently than Visa, and has more of an “all or nothing” approach. MasterCard doesn’t care if you have a “zero” value as a tax amount – there is no advantage to that. Similarly, MasterCard does not distinguish B2B merchants the same way Visa does. You either get level 3 rates by submitting ALL level 3 info (MasterCard calls these “Data Rates”), you get level 2 rates if you submit a PO number and a tax amount greater than $0, or you get “Data Rate 1” rates if you only submit AVS information. Submitting a sale without AVS information will result in the dreaded “Standard” rates. Here’s how it looks:

 MasterCard Qualification —>

Data Rate 3

Data Rate 2

Data Rate 1

Standard

What’s Required?

All Level 3 data All Level 2 Data

Tax > $0

AVS Data No AVS Data

Which Rate is the Best?

Best Rates Better Rates Bad Rates Worst Rates
MC BUSINESS DEBIT CARD
1.90% + $0.10 2.20% + $0.10 2.65% + $0.10 2.95% + $0.10
MC Business lvl 1 CARD
1.75% + $0.10 2.00% + $0.10 2.65% + $0.10 2.95% + $0.10
MC BUSINESS LVL 2 CARD
1.91% + $0.10 2.16% + $0.10 2.81% + $0.10 3.11% + $0.10
MC BUSINESS LVL 3 CARD
1.96% + $0.10 2.21% + $0.10 2.86% + $0.10 3.16% + $0.10
MC BUSINESS LVL 4 CARD
2.06% + $0.10 2.31% + $0.10 2.96% + $0.10 3.26% + $0.10
MC Fleet/purch/corp card
1.90% + $0.10 2.50% + $0.10 2.70% + $0.10 2.95% + $0.10

Why are there 4 different Visa/MC Business cards?

It’s almost like they try to make it confusing! You’re probably asking yourself why there are four different Visa and MasterCard card types, each with varying rates. What do those tiers/levels next to the card name mean, and why do the rates shift?

In short – this is totally out of your control. These “tiers” or “levels” are typically known as the Annual Account Spend, and the card category is based on how much money your customer spends with this card on an annual basis. The more money that’s spent on any given business card, the higher the rates are for that card for any merchant that accepts that card. Talk about confusing. Although counter-intuitive, your business is actually going to pay a higher interchange rate if you accept a card from a customer who spends more money.

Visa Annual Account Spend interchange

Visa Annual Account Spend

Customer Annual Spend

Visa BUSINESS Tier 1 CARD
Less than $20,000
VISA BUSINESS TIER 2 CARD
$20,001 – $39,999
VISA BUSINESS TIER 3 CARD
$40,000 – $99,999
VISA BUSINESS TIER 4 CARD
Over $100,000
MC Annual Account Spend interchange

MasterCard Annual Account Spend

Customer Annual Spend

MC BUSINESS LVL 1 CARD
Less than $25,000
MC BUSINESS LVL 2 CARD
$25,001 – $50,000
MC BUSINESS LVL 3 CARD
$50,001 – $100,000
MC BUSINESS LVL 4 CARD
Over $100,000

Large-Ticket Reductions

You probably thought there were no more charts. Sorry to disappoint, but interchange reductions have a lot of influencing factors. Another is special pricing for Large Transactions – depending on several factors (of course) your larger sales can qualify for additional discounts. See the below chart for details.

 Card Qualification —>

MasterCard Large Ticket

Visa Large Ticket GSA

Visa Large Ticket

What’s Required?

All Level 3 data

Transaction >$7,254

All Level 3 data

Government-issued Card

Transaction >$5,984

All Level 3 data

Corp/Purch Card

Transaction >$8,725

visa Purchasing card
———- 1.20% + $39.00 1.45% + $35.00
MC Business lvl 1 CARD
1.20% + $40.00 ———- ———-
MC BUSINESS LVL 2 CARD
1.36% + $40.00 ———- ———-
MC BUSINESS LVL 3 CARD
1.41% + $40.00 ———- ———-
MC BUSINESS LVL 4 CARD
1.51% + $40.00 ———- ———-
MC FLEET/PURCH/CORP CARD
1.25% + $40.00 ———- ———-

Who's eligible for these reductions?

Except for the Travel/Entertainment merchants listed below, almost all merchants are eligible for the above rate reductions. Here are the ineligible merchant types, per Visa/MasterCard regulations:

Ineligible Merchants

Restaurants/Fast-Food (MCC 5812, 5814)
Hotels/Lodging (MCC 7011)
Car Rentals (MCC 7512)
Passenger Transport (MCC 4511, 4112)
Direct Marketing (MCC 5962, 5966, 5967)
Airlines/Cruise Lines (MCC 3000-3299, 4411)

Are you confused yet?

We get it… This is confusing stuff! That’s why we recommend using a solution that does the heavy lifting for you. Dharma offers the MX Merchant B2B App, so that your sales will automatically qualify for the lowest possible rates, no matter how you enter them.

It’s not common knowledge – but typically, merchants can save over half of a percent by following proper B2B processing guidelinesUsually, these guidelines can feel onerous – merchants are required to submit all sorts of additional data with each sale, which can be cumbersome, time-consuming, and very confusing. So most merchants simply don’t bother. The above charts are a testament to this!

That’s where the MX B2B app comes into play. With the MX B2B App, you don’t have to do anything special! Once enabled, you simply enter a sale into the MX Virtual Terminal like normal, and in the background we’ll populate any “missing” information. This ensures that you’ll always get the lowest rate on any given sale. No extra work, no extra hassle, no extra time spent.