Level 3 Interchange

Level 3 Interchange Rates Improve

Pass Level 3 data to eliminate non-qualified surcharges

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.  The difference between the best and worst rates equal $12 in savings per $1,000 in sales.  However, the difference between the best and next best rates across the entire Interchange spectrum continues to favor those merchants processing at Level 3.  And these savings continue to grow.  For example:

  • With the April 2014 Interchange announcement, MasterCard combined Corporate, Purchasing and Fleet Interchange and renamed them “Large Market” card products.  With this change it became even more important to submit Level 3 data since the difference between Level 2 (Date Rate 2) and Level 3 (Data Rate 3) jumped from 0.20% (20 basis points) to 0.70% (70 basis points) - or in other words $7 in savings per $1,000 in MasterCard sales. 
  • With recently announced changes scheduled to go into effect October 2014, Visa will implement Interchange rate changes in the U.S. that will impact credit card purchase transactions for Visa Corporate and Visa Purchasing commercial card products making obtaining Level 3 Interchange even more valuable.  The difference between Corporate and Purchasing at the preferred B2B Interchange rate and the incentive Level 3 Interchange rate will go from 0.15% (15 basis points) to 0.70% (70 basis points) - or in other words $7 in savings per $1,000 in sales.  The difference between the best Corporate and Purchasing Level 3 Interchange versus Corporate and Purchasing Electronic Interchange will jump to $11 in savings per $1,000 in Visa sales.
  • These changes highlight the need to work with a B2B payment specialist who can provide the tools to manage your Interchange qualifications and 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% and in some cases much more!  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.