What is Business Level 1, 2 and 3 Credit Card Processing Purchasing Cards

By Santa Barbara Merchant Services on May 14, 2015 at 10:31 AM in Credit Card Payment Processing

Levels 1, 2 and 3 Credit Card Processing

Credit card transactions can fit into one of three different categories: Level I, Level II or Level III processing. With each level of processing, there is a certain amount of data and requirements needed for verification and authorization. This data can range from very limited to very detailed, depending on the type of customers or clients your business serves. The more data fields required, the lower the processing rates.

Transactions submitted with Level 2 and Level 3 card data qualify for lower Visa and MasterCard Interchange rates. Transactions with Level II Card Data can clear at rates between 0.05% to 0.50% lower than the exact same transactions submitted without it. Transactions with Level III Card Data can clear at rates between 0.25% to 2.5% lower than the exact same transactions submitted without it. Many government and institutional cardholders, like those paying with GSA SmartPay, are starting to require vendors to submit Level 3 Card Data.

What Is Level 1 Processing?

Level 1 credit card processing refers to business-to-consumer (B2C) transactions, during which consumers use their personal credit cards to make purchases both large and small. The data required for a Level 1 transaction to go through is small, with just the merchant name, transaction amount and date needed.

What Is Level 2 Processing?

Level 2 credit card processing refers to a more detailed transaction designed to support business-to-business (B2B) payment processing. Business or government clientele require business-specific payment methods, with the ability to monitor and control corporate and employee spending. Level 2 credit card processing simplifies the B2B transaction, improving customer service for your business clientele and providing them with more accurate transaction reports.

The data required for a Level 2 transaction includes:

Merchant name
Transaction amount
Tax amount
Customer code
Merchant postal code
Tax identification
Merchant minority code
Merchant state code
What Is Level 3 Processing?

Level 3 credit card processing requires the most detailed data, and the transactions are often made with government or corporate purchasing cards. Government agencies and businesses use purchasing cards for enhanced reporting and more control over employee purchases. The data fields required for Level 3 processing includes those from Level 2 transactions, in addition to a number of others such as item product codes, item descriptions and quantities, item tax rate, ship from postal code, freight amount, duty amount, destination postal code, destination country code, and more.

Santa Barbara Merchant Services B2B Processing Solutions

B2B credit card processing solutions such as Level 2 processing can help B2B merchants build strong relationships with their clientele, as well as increase large ticket transactions with corporations and government agencies. At SBMerchant, we offer Level 1, Level 2 and Level 3 processing solutions, so no matter what type of customer you serve, you can improve your business and enjoy always-low processing rates.

Contact Santa Barbara Merchant Services today for more information on our B2B credit card processing services and supported gateways or terminals.