How to Save Money when Accepting Business and Corporate Cards - Decoding Level 2 and 3 Payments Data
Meredith Weigelt ● December 3, 2022 ● 6 min read
Partnering with a provider that has smart technology is the best way to capture level 2 and 3 data. Paystri solutions collect credit card data and secure the lowest Interchange rates for our B2B customers, potentially lowering transaction costs as much as 35%. If you develop software with a payments integration, capturing this level 2 and 3 data will not only save your customers on costs, it'll help their customers identify their transactions more easily.
Why Data Levels Matter for B2B Businesses
While line-item consumer data can be an important aspect of success for any business, it becomes far more important in the case of those who primarily cater to other businesses or organizations.
Lower risk means lower costs for both your business and your customers. However, access to higher-level consumer data does more than just reduce the amount you owe in interchange costs. It also helps to ensure the safety of purchases on both ends of the transaction – and helps you to better know who you are serving.
If your company is working with business, corporate, government, and nonprofit organizations, you may be filling larger orders than a standard consumer-based merchant would. You may also be offering items or services with a much higher ticket price. As a result, these purchases come with higher associated risks.
The best way to reduce these risks is by accessing as much information about each purchase as possible. This helps your company to provide service that is tailored to each individual client or company you work with. It also helps to reduce associated costs, since most credit card companies – such as Visa and Mastercard – offer an appreciable reduction for merchants with access to this information. The less data transmitted, the riskier the transaction and the higher cost.
Visa B2B Interchange rates are as follows:
- Visa commercial level 3 is 1.90% and $0.10
- Visa commercial level 2 is 2.50% and $0.10
- Visa commercial card not present is 2.70% and $0.10
- Visa non-qualified is 2.95% and $0.10
Put yourself in the shoes of the companies or organizations you serve or integrate with. Who would you rather do business with – a company that knew everything they needed to about your purchases and provided you with personalized service at a lower cost, or literally anyone else?
Leveling Up Your Line Data
The true advantage of Data Levels 2 and 3 for the merchant accepting credit cards is the ability to lower their processing costs through interchange optimization, moving from a standard transaction to a Level 3 transaction. Furthermore, because the additional data is transmitted to the credit card statement of the person who owns the credit card, the transaction involves less risk. That data could help you create a better experience for your consumers and ISV partners while also reducing costs for everyone involved.
Why wouldn’t you want to harness the power to do all of that?
Payment through a typical payment processor provides a merchant with a basic set of details about a consumer and their purchase. These details are generally limited to the following:
- The account number associated with the purchase
- The CVV and expiration date of the card or account
- The amount the purchase was authorized for
- The consumer’s zip code or, less often, complete billing address
In recent years, many merchants have partnered with integrated payment processors that deliver more detailed information from consumers. This second layer of information is often referred to as ‘Level 2 Data’, and generally includes the following details:
- All of the information obtained with basic data processing
- Sales tax for the noted purchase*
- Sales tax ID or other information*
- Invoice numbers or customer codes**
*The Sales Tax is valuable to the cardholder because as a business expense, the sale tax is deductible. **The invoice numbers or customer code allows them to easily track the expense or apply it to a specific job, client, or business unit.
Level two may also include:
- Merchant’s zip code or address
- Merchant minority code
- Merchant state code
However, there is still vast and valuable information available to merchants when using the right payment processing solution. These details may be referred to as ‘Level 3 Data’ and offer the most comprehensive picture of consumer behavior. This level of consumer data is the most effective since it delivers all of the previous information as well as the following details:
- Item product code
- Item quantity
- Item description, including tax rate, tax amount, tax identifier, unit of measure, extended amount, and other details
- Freight and duty amounts
- Destination postal code, address, and more
When it comes to merchant costs, the associated risk is one of the biggest factors in establishing its calculation. Transactions with lower perceived risks will generally be charged less in interchange fees, which are the standard fees associated with using any credit card company and integrated payment processor. These fees can really eat into your margin over time, which is why reducing them via interchange optimization is an important factor in streamlining your business expenses.
Additionally, these savings can be passed on to the other businesses or customers you serve, or for ISVs, the software with which you integrate. With lower interchange costs, everyone spends less to do business – and your company keeps more money in its accounts as a result!
How Does Paystri Solve the Consumer Data Level Dilemma?
While it is easy to see why line-item consumer data is so important, it is much harder to find a payment processor that provides use of this data. Some payment processors offer the option to retrieve this data, but far fewer make it part of the process automatically, so your team never has to worry about additional steps.
At Paystri, our goal is to provide all of our clients – especially those catering to other businesses or government organizations – the necessary tools for success. This includes automatic access to level 2 and level 3 consumer data. Everything down to the detailed line-item description is available without numerous frustrating steps for your team.
We understand that access to this information does more than just provide exceptional service for your customers. It also helps to establish the correct MCC – or merchant category code – to minimize interchange costs. Both you and your customers stand to save more than 30% with many credit companies by utilizing our services. No extra time, extra steps, or extra stress required!
When you are ready to find out how Paystri can solve your interchange fee problem and improve the services you provide to your B2B consumers, contact us to learn more. Your customers – and your bottom line – will be so glad you did!