Implementing level 2 & level 3 data processing will greatly benefit merchants that accept credit card payments in a B2B or B2G environment.
In other words, learning about level 2 & 3 data will benefit your business if your customers are other businesses, corporations, government agencies or universities. Especially if you’d like to:
Significantly reduce expenses associated with accepting credit card payments.
Increase cash flow & speed up payments from net-30-60 to a few days.
Improve marketability and increase sales through customer satisfaction.
Increase competitiveness in winning RFPs or government contracts where p-cards are the required form of payment.
What is level 2 & level 3 data?
These data points are also known as enhanced data, which refers to the line item invoice detail about the goods or services being purchased. There are actually 3 levels, we’ll explain…
Level 1 data: Minimal transaction info typically associated with consumer transactions (B2C).
Level 2 data: additional data regarding sales tax, customer code, PO# captured at the point of sale.
Level 3 data: Significantly more info provided before settlement for optimal reporting to the buyer & seller.
Enhanced Data Chart: Here are all the possible line item details.
What is level 3 processing?
This is when a merchant enters in enhanced data with their credit card transactions. The invoice data is passed electronically from the supplier (or merchant) to the card issuer’s reporting system, then into the buyer’s accounts payable reporting system.
What is the point of all of this?
Visa & MasterCard created value & benefits associated with using purchasing cards to buy goods & services so that businesses and government agencies are enticed to use them.
Customer Benefits:
By using a purchasing card businesses automatically receive deeper transaction details to more effectively manage and control their spending by:
- reducing costs & increase operating efficiency.
- better management and reporting of travel-related expenditures.
- giving procurement managers detailed transaction data to closely monitor and control purchasing expenditures.
Merchant Benefits:
There are many benefits to merchants that practice level 3 data processing but most notably are the savings they experience. Visa & MasterCard encourage merchants to enter line item detail with their transactions by offering substantial reductions on the interchange fees associated with accepting purchasing card payments. As you’ll see in the chart below, the interchange fees are cut by as much as 39%!
Additional merchant benefits include:
- Reduced manual invoicing overhead costs.
- increased chances of winning RFPs or government contracts.
- Enable simple reporting.
- Enhanced customer satisfaction = increase in sales.
- Reduced risk of fraud, disputes & chargebacks.
The challenge:
B2B and B2G merchants are experiencing increased pressures from their customers to pass line item details in a marketplace that doesn’t offer many reliable level 3 processing solutions. Most merchant account providers are unable to properly set up a level 3 data capable account let alone provide payment gateway software that can facilitate level 3 processing.
The Solution:
B2B Payment Gateway’s technology enables the transmission of level 3 data which will allow you to meet customer demand to provide invoice line item detail. When you work with us we guarantee that your account is setup correctly under the right MCC (merchant category code) which is a critical part of making sure your business transactions qualify at the lowest possible interchange rates! Request a free consultation or call us at 1.855.550.2551
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