What is 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. (See a list of qualifying interchange rates, here). 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. Dharma offers Level 3 support through the MX Merchant interface using the B2B app. Pricing is only $20/month. MX Merchant will automatically populate all fields required for Level 2, plus the following:
- Ship-From Zip Code
- Destination Zip Code
- Invoice Number
- Order Number
- Item Product Code
- Item Commodity Code
- Item Description
- Item Quantity
- Item Unit of Measure
- Item Extended Amount
- Freight Amount
- Duty 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! (See a list of qualifying interchange rates, here). 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. Don’t worry, MX Merchant automatically passes this information through with each sale to make things simple:
- Merchant Name
- Transaction Amount
- Tax Amount (Between 0.1% and 31% of the total amount)
- Transaction Date
- Customer Code or PO number
- Merchant Zip Code
How Do I accept Level 2/3 data?
Dharma will help ensure your account is setup properly to accept level 2 and 3 data. Dharma uses the MX Merchant system for level 3 sales, and we’re trained in setting everything up properly so you’ll get access to low rates, right from the beginning. MX Merchant has numerous upper level features, such as recurring billing, email invoicing, and more.
B2B (Level 2/3) processing can be enabled in your MX Merchant gateway for an additional $20/month. If you’re taking any B2B sales, chances are that the cost savings on just one big sale will easily exceed $20 – making the B2B app an easy choice.