Level 3 Card Data
Level 2 and Level 3 Card Data, also referred to as Level II and Level III, is additional information that can be attached to a credit card transaction string to provide more information for business, commercial, corporate, purchasing, and government cardholders. Both Visa and MasterCard maintain lower Level 2 and Level 3 Card Data Interchange Rates that are applied to transactions that are submitted with Level 2 and Level 3 Data.
Commercial, Corporate, Business, Purchasing, and Government credit card transactions submitted with Level 2 and Level 3 data can obtain lower Interchange Rates, and thus provide the merchant with a lower processing cost, than the exact same transactions submitted without the additional data. Therefore, it is always in the merchant's best interest to submit Level 2 and 3 data whenever possible.
Submitting Level 2 Card Data
Merchants will often encounter Level 2 Card Data when they run a corporate/commercial/business card and the credit card terminal prompts for a "Customer Code" or "PO Number". This is often mistaken as a request for the CVV2 code on the back or front of the card.
In fact, the terminal is reading the chip on the card and recognizing that the corporate/commercial/business credit card account has a Customer Code/PO Number feature. The Customer Code/PO Number is a 4 digit number that appears on the cardholder's credit card billing statement that allows the cardholder to track purchases made with the card number. This is useful when more than one employee or person may have access to the card or card number.
Unfortunately, many cardholders either do not use the feature, do not know what it is, or do not know the customer code number. And for many merchants, even though they can save money, it's not worth the extra time and effort to gather and enter the extra data.
Submitting Level 3 Card Data
Level 2 data is pretty easy to submit using a credit card terminal, but Level 3 data is line item detail similar to the information on an itemized invoice, and can only be submitted via specialized payment applications, making transactions even more complicated and take even longer.
Level 3 Card Data consists of 20 plus fields for things like Product Code, Item Description, Item Quantity, Discount Amount, Freight/Shipping Amount, Duty Amount, Item Commodity Code, Destination Country Code, Extended Item Amount, and every single field has to entered correctly, or the transaction will not qualify for the lower interchange fees.
How and when should a merchant submit Level 2 and Level 3 Card Data?
So, we can see that merchants can save money on interchange fees by submitting additional data with their credit card sales, but in order to do so, it takes extra work, special software, and it makes transactions more complicated and take longer. What is the merchant to do? Like a lot of things in life, there are two options: do it yourself or get someone else to do it for you.
Do It Yourself: Submit Level 2 and Level 3 Card Data with Converge Level III
Converge Level III is a browser-based hosted payment solution and API designed specifically for processing Purchasing, GSA, Commercial, Corporate, and other Business cards. Converge prompts for and stores line item detail to get the lowest possible interchange rates. Card numbers and Level III data is stored securing in customer profiles on the Converge server. Information only needs to be entered once, and then the card can be charged quickly and easily. We provide support and training to ensure that all data is entered correctly. This is a good option for merchants that deal mostly or exclusively with other businesses, large corporations, institutional customers, and the government. All transactions are card not present in an office environment, have large ticket sizes, and are often billing the same card on a recurring basis.
We Do It For You: Commercial Card Optimization
Using proprietary back end systems, Commercial Card Optimization automatically adds Level 2 and Level 3 data to transactions without any changes to how a merchant processes cards. This allows the merchant to obtain the lowest possible Interchange fees without using specialized equipment or entering any extra data themselves. Everything happens behind the scenes at the processor level. Merchant participation in Commercial Card Optimization is minimal. There are no upfront costs, only a gain share based on improvement performance. This is a good option for merchants that sell to consumers and businesses, transactions are both card present and card not present in a variety of environments, such as retail, hospitality, and e-commerce, and when it’s not practical or cost-effective to gather extra data and use specialized payment applications.