If you operate a business-to-consumer (B2C) company, you are using Level 1 credit card processing. This is what most companies use when processing standard consumer credit cards offered by Visa, Mastercard, Discover, and American Express.
If your business provides goods or services to other businesses (business-to-business or B2B), especially if you interact with small to medium-sized businesses, you might have to explore Level 2 processing as an ideal solution.
However for larger corporate or government purchases, upgrading to Level 3 payment processing will help optimize interchange rates and save money. Yet, what exactly is Level 3 credit card processing, and why does your B2B need it?
With Level 3 credit card processing, all transactions require the capture of specific line item data typically around 15-20 fields. However, that number can go as high as 100 — depending on the client.
Common line item details for Level 3 credit card processing include:
Why require all of these additional details? What is the benefit to the buyer — and more important — what is the benefit to you?
The most important benefit for customers who buy with Level 3 credit cards is control. By requiring all of this extra information, they can more easily restrict things like:
Given the sheer volume of multinational and governmental spending, such controls are necessary. They allow organizations to more carefully track where money is going and why.
However, there are several benefits for you — the merchant:
Level 3 processing isn’t necessarily suited for every business, especially if you deal mostly with consumers or smaller businesses. Then you’re probably better off with Levels 1 and 2.
Though if Level 3 is right for you, keep in mind that standard credit card terminals do not support this type of processing. Submitting Level 3 data requires the use of specialized payment software that is accessed via a secure website application. Data is typically passed to the payment platform via integration with a merchant’s ERP system.
If you have additional questions about Level 3 credit card processing, contact us today to speak to a payments expert.
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