Credit Card Processing: Level 3 Interchange

A key aspect of credit card processing fees which can affect a merchant who sells to other businesses (B2B) is the interchange level of the selling merchant. This is different than transactional interchange rates, which rates are affected by the method which your company secures payment. Instead, your company’s interchange levels are completely dependent on how much information your company provides regarding the purchasing business.

Interchange Processing Levels

Level 1 – Representing the most basic interchange level, most business-to-consumer (B2C) transactions are processed at level 1 interchange rates. This is the default level at which most credit card transactions are processed.

Level 2 – Depending on the credit card network, your company will need to provide a variety of information. Some of the information may be the purchasing business’ purchase ID, sales tax amount, and more.

Level 3 – In-depth information is necessary to achieve a level 3 interchange rate. Your company will need to provide all the information from level 1 and 2 as well as other metrics such as the unit of cost, quantity, product code, debit or credit indicator, and more. All of these factors are highly dependent on which credit card network is used to purchase from your company.

Information Required When Processing Level 3 Interchange

Visa and Mastercard require all the information for level 1 and 2 on top of the requirements for level 3 interchange rates. American Express has two versions of level 3 interchange rates, while Discover has very few interchange levels and processes most transactions at the same interchange rate.

Visa Level 3 Interchange Data – Visa requires a variety of shipping and receiving information from the selling merchant before they can qualify for level 3 interchange.

Mastercard Level 3 Interchange Data – Most of the shipping information that Mastercard requires for level three interchange is directly related to the products being shipped.

Depending on volume, there are two different designations when it comes to American Express interchange level 3: Level 3 Merchant designated and Level 3 Merchant non-designated.

American Express Level 3 Designated Interchange Data – Merchants need to meet a transaction threshold and submit required documentation.

American Express Level 3 Non-Designated Interchange Data – There is also a threshold for this interchange level, but no documents are required.

Above is simply general information for level 3 interchange rates per the three card networks. However, this information is provided at the discretion of the various card networks and it is subject to change on a regular basis. Also, depending on the industry which your company provides services, more information may be required.

Verisave Helps Businesses Attain Top Interchange Rates

Acquiring the best interchange level for your company is a complicated process. Each card network must be worked with individually and information must be submitted for each Business Customer your company works with for transactions to be processed at the best available level. We know exactly what we are doing when it comes to optimizing interchange rates to save money and could add significant value to your accounting team by saving time and money.

Verisave offers a free analysis of your company’s merchant account statement to start the process of lowering your company’s interchange rates. After 2-3 days, you will receive a detailed report of findings. Our team of experts will be able to identify areas for improvement and several plans to help lower your company’s overall merchant processing fees. The majority of Verisave clients see 25% to 35% reduction in their fees. Submit your company’s merchant account statement today and see what Verisave can do!

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