For many B2B businesses, accepting credit cards is a convenient way to get paid, but card processing fees can add up quickly. Businesses that process large commercial transactions may pay more than necessary when their payment systems aren't configured to use available transaction data.
Level II and Level III transaction data can help qualifying B2B merchants reduce certain card acceptance costs. These enhanced data options allow businesses to submit additional information with commercial card transactions, which can help some purchases qualify for more favorable interchange rates.
Level II and Level III data refer to additional information submitted with certain commercial card transactions. The goal is to provide more details about a purchase so the card network can better identify and evaluate the transaction.
Level II data typically includes information beyond the basic transaction details, such as sales tax and customer codes. Level III data can go further by providing detailed information about the products or services included in the purchase.
For qualifying B2B merchants, submitting the appropriate information can potentially help lower interchange costs on eligible transactions.
A general retail payment system is typically designed around straightforward consumer purchases. A customer buys a product, pays the listed amount, and receives a receipt containing the basic transaction information.
B2B transactions can be considerably more detailed. Commercial buyers may need information on purchase orders, tax amounts, product descriptions, quantities, unit prices, and other details for internal accounting and reconciliation.
That difference matters for payment processing. A system built primarily for retail transactions may not be configured to capture and transmit the commercial data needed to take advantage of Level II or Level III processing opportunities.
The specific data requirements can vary based on the transaction and the applicable card network rules. Businesses considering enhanced data should understand what information their payment system needs to collect and transmit.
Depending on the transaction, businesses may need to provide information such as:
Level III processing generally requires more detailed line item information than Level II processing. Businesses should confirm the applicable requirements before changing their payment setup.
Simply having a payment processor that supports Level II or Level III data doesn't mean every transaction will automatically receive the potential cost benefits. Businesses must collect, format, and submit the information correctly.
One common mistake is failing to capture required fields at the point of sale or during invoicing. Another issue can occur when a business collects the information, but its payment technology doesn't pass the data correctly to the processor.
Other problems may include:
Even small configuration issues can prevent eligible transactions from receiving the intended treatment.
Before making a change, businesses should look closely at how their current payment system handles commercial transactions. Consider where payment information is collected, how invoices are generated, and whether transaction data is automatically transmitted to the processor.
It's also important to determine whether your existing technology can support the level of detail required for enhanced data processing. In some cases, a software integration or configuration change may be enough. Other businesses may benefit from a payment solution designed for B2B transactions.
The goal is to create a process that captures the necessary information accurately without adding unnecessary administrative work for your staff.
Don't base a payment processing upgrade on advertised rates alone. Businesses should consider their transaction volume, average ticket size, commercial card mix, technology, and current processing costs.
Start by reviewing your existing statements and identifying how much of your payment volume comes from commercial cards. From there, you can ask a payment specialist whether your business may qualify for enhanced data processing and what changes would be required.
It's also worth asking about implementation, reporting, integrations, and ongoing support. A lower potential processing cost isn't particularly useful if the system is difficult for your team to manage.
Level II and Level III transaction data can allow qualifying B2B merchants to approach card processing differently. By submitting additional commercial transaction information, businesses may qualify for more favorable interchange treatment on eligible purchases.
The biggest opportunity may come from making sure your payment technology is built to capture and transmit that information correctly. Reviewing your current system, identifying setup issues, and working with a provider familiar with B2B payment processing can help you determine whether an upgrade makes sense.
If your business accepts commercial card payments, our team at SlidePay can help you evaluate your current payment processing setup. We can discuss your transaction needs, technology, and potential opportunities for a more efficient B2B payment solution. Reach out to our team today to learn how we can help you make the most of your payment processing strategy.
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