Level 3 Interchange

Pass Level 3 data to eliminate non-qualified surcharges and lower acceptance cost

Interchange compliance requirements

For commercial card types that can qualify for Level 3 Interchange, address verification, invoice number, tax amount, and line item detail fields like product code, item description, item quantity, unit of measure and extended item amount must be submitted with the standard sales information. In addition, specific Interchange compliance requirements must be managed and include merchant category restrictions, authorization, clearing, timeliness and registration. 

MasterCard and Visa are continuously making adjustments to both their Interchange rate and qualification requirements.  Currently Visa and MasterCard both require submitting a tax amount greater than zero to qualify for Level 2 / Data Rate 2 Interchange rates but for tax exempt transactions Level 3 / Data Rate 3 Interchange rates are available provided data and other processing requirements are met. 

  • Starting in April 2012, Visa allows Corporate cards to qualify for Level 3 Interchange while at the same time increasing its Level 3 Interchange rate itself.  Both Visa and MasterCard have Large Ticket Intchange rate programs for commercial cards. For 2012, Visa increased its Purchasing Card Large Ticket rate and drop its registration requirements.  Visa implemented a new P-card Larget Ticket Purchasing Card Product and Interchange Fee program for transactions from $10,000 to over $500,000.  Visa also introduce a settlement match system edit that validates the amount in the clearing record against the amount in the original authorization record to ensure an exact match for accounts defined as B2B.   
  • In April 2013, MasterCard introduced a new Small Business Spend Processing (SBSP) Interchange structure that is based on cardholder annual spend and enrollment. Business credit card products will be eligible for enrollment by card issuers for the SBSP Interchange. If business card transactions are not enrolled they will continue to qualify at the existing Interchange categories like Business, World Business and World Elite Business.  These changes highlight the need to work with a B2B payment specialist who can advise you on setting payment policies to help lower your processing expenses.
  • Merchants can track Interchange changes and modifications and work with a Vantage payment advisor to understand any impact. 

Qualifying for incentive Level 3 processing rates while eliminating Non-Qualified surcharge fees may reduce your processing expenses by an average of 15% to 20%!  For example, the difference between a tax exempt MasterCard business transaction processed at Data Rate 3 Interchange verses Standard Interchange is 120 basis points.  This is a significant savings. 

Leading indicators that your processing costs are too high

  • You have the same rates for both MasterCard and Visa
  • You have only one Qualified Rate
  • You pay Mid & Non-Qualified Rates
  • You use a terminal for processing P-card transactions
  • You use a “B2Consumer” virtual terminal or payment gateway

Contact us for a Level 3 Interchange quote detailing Visa, MasterCard and Discover commercial card rates, qualification requirements and next best rates.