Level 2 and Level 3 processing are advanced credit card processing methods that provide more information about a payment. This information can help merchants qualify for lower processing fees and interchange rates.
What's included?
- Level 2
Includes Level 1 data, plus additional information like the customer code, PO number, and tax amount
- Level 3
Includes Level 2 data, plus more detailed information like the item description, quantity, and unit of measure
Who uses it?
- Level 2 and Level 3 processing are primarily used for business-to-business (B2B) and business-to-government (B2G) transactions.
- They are rarely used for consumer payments.
What are the benefits?
- Lower processing fees: Merchants can receive lower processing fees for domestic payments.
- Better decision-making: Businesses can gain insight into spending patterns and business activities.
- More accurate records: Level 3 reporting can help with accounting and reconciliation processes.
What card networks support it?
- Visa, Mastercard, and American Express support Level 2 and 3 processing. Discover only supports Level 1 processing.