In merchant processing, Level II and Level III data refer to additional transaction details submitted during credit card payments, typically for business-to-business (B2B) or business-to-government (B2G) transactions. Providing this enhanced data can significantly reduce interchange fees, resulting in cost savings for merchants.
Here’s a breakdown:
Level II data adds more detail to a transaction, typically required for corporate cards or purchasing cards used in B2B or B2G transactions. Including this data qualifies merchants for lower interchange rates.
Level II Data Includes:
Level III data is the most detailed level, primarily for large-scale B2B or B2G purchases. This level is typically used for corporate purchasing cards and requires itemized transaction information. Submitting Level III data can lead to significantly lower interchange fees because it reduces risk for card issuers.
Level III Data Includes:
By submitting Level II or III data, merchants handling B2B or B2G transactions can optimize cost savings and enhance reporting accuracy for their clients.
To process Level II and Level III transactions, merchants need specific equipment and software that can capture and transmit the enhanced data required. Here’s what’s needed:
A Level II and Level III compliant payment gateway or virtual terminal is critical. These systems can input and transmit the additional transaction details (e.g., tax amounts, item descriptions, etc.) necessary for Level II and Level III processing.
Examples include:
Merchants can use advanced POS systems capable of capturing the required fields for Level II and Level III transactions. These systems must integrate with payment software capable of processing the enhanced data.
EMV-compatible credit card terminals that support Level II and Level III processing are often required for in-person B2B transactions. However, they need to be paired with the right payment software to capture the data.
Popular models include:
Merchants need software capable of supporting and transmitting the detailed data fields required for Level II and III transactions. This often involves integrating their payment system with:
Many of these integrations can automatically populate Level II and Level III data fields, reducing manual entry errors.
For remote or virtual transactions, a virtual terminal allows manual entry of all required fields, such as sales tax, invoice numbers, and line-item details. This is particularly useful for telephone or email orders.
To process Level II and Level III transactions, merchants typically need:
By ensuring their systems meet these requirements, merchants can qualify for lower interchange rates and optimize savings for B2B and B2G transactions.
Payment Divas
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