The differences between Visa and MasterCard Level 3 processing

This blog has spent a substantial amount of time discussing the advantages of processing Level 3 data in order to qualify for the lowest possible interchange rate. While it's true that understanding the need to submit line item detail is crucial, there are other factors that come into play and may affect the way a vendor processes information. One of the more important things to understand is the way the major credit card companies define Level 3 data.

Perhaps the best place to start is the difference in terminology. While Visa refers to Level 3 data, MasterCard calls it Data Rate 3. They are both essentially the same thing, and it's important to understand that to prevent confusion during the processing of B2B payments. Understanding the terms can help vendors recognize which card is being used, which in turn will allow them to adjust according to each card's specifications.

The rates between the two are slightly different. While rates often change, there will likely be differences between the two that need to be understood in order to qualify for the lowest possible interchange rate.  For example, Visa purchasing card transactions must have a matching authorization amount and settlement amount and transactions performed initially as authorization only and later settled can not qualify for Level 3 pricing.

This highlights the importance of managing your ongoing Interchange qualifications and aligning them with appropriate payment polices.

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