Merchants Can Reduce Costs with Level III Processing

You have probably been told that business credit cards are expensive to process but that isn’t exactly true. There are steps that merchants can take to get lower pricing. If your company accepts business credit cards, you can qualify for better rates. B2B transactions don’t have to cost more when utilizing Level III data collection.

If you are a merchant that accepts business credit cards, then you know that the payments you accept are processed through an intricate and often complicated network of providers. Several factors affect who touches a payment. However, all payments are required to pass through the card networks such as Visa, Mastercard, American Express, and Discover.

When a payment passes through the card networks, a fee known as interchange is collected. Interchange is set by the networks, and that is why many merchants believe there is no way to reduce this specific fee. But that is not the case.

Although rates are set in advance by the networks, lower rates can be applied to payments that meet certain criteria. If the payment gateway passes Level III card data with a transaction, the details that are provided enable the networks to identify which transactions qualify for lower interchange rates and those rates typically equal lower costs.

The card networks use many factors to determine interchange for these of transaction types, including the card type, the amount of the transaction, and whether the card was present at the time of the sale. For example, a $10,000 transaction that is made via a purchasing card on the Internet will be charged a different rate than a $100 transaction that is made via a pin-less debit card that was presented at the point of sale.

When this level of detail is included with qualified transactions, it can significantly reduce costs. However, not all processors pass Level III data and it is important that your processor provides that benefit to your company if your business processes corporate credit cards.

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