Most of our merchant account clients transact a large percentage of Business-to-Business (B2B) payments. As such, Providing Level II or Level III data can significantly reduce your cost.
What is it?
Level II/III refers to sending detailed information on B2B Purchase Card (P-Card) transactions. Many businesses and government offices require vendors to accept Level II/III information along with the sale. Basically, Visa/MC recognizes that by providing this additional information, the sale is more likely to be legitimate and less likely to be contested (Chargeback). With the lower risk, transactions qualify for a lower interchange rate.
What is required?
Level II and Level III requires certain information be passed to qualify for the lower interchange rate. For this discussion, we will focus on Level II as it is the easiest qualification, generating the most savings. Basically, to qualify for Level II, you will need a stand-alone credit card terminal or a gateway that is equipped to process Level II data. Most of the clients we work with process B2B transactions through a gateway. All of the gateways we utilize are capable of passing Level II transactions. Since all may not be, check with your current vendor to confirm they provide Level II processing or call us for assistance.
What data is required?
- Merchant Name
- Transaction Amount
- Tax Amount (Between 0.1% and 31% of the total amount)
- Transaction Date
- Customer Code or PO number
- Merchant Zip Code
What could this be worth?
For Level II, it is about 0.60% reduction on all qualified P-Card transactions.
For example, we recently met with a large construction equipment dealer who does about $6,000,000 annually in P-Card transactions. Having these transactions qualify for Level II will improve their bottom line by $36,000 annually. Obviously, your business is different but you can do the math. The savings are significant and go directly to the bottom line. What impact would this have on your financials?
What do I need to do?
Talk with your current vendor or get in touch with Merchant Consulting Service. We would be happy to guide you, even if it does not lead to business for us. Give us a call at 321-8000-6533 or email britt@merconserv.com.