B2B Payment Processing: How Level 2 and Level 3 Data Saves You Money

Business-to-business (B2B) merchants often face some of the highest credit card processing costs because their customers frequently use corporate purchasing cards, government cards, and business credit cards. These card types carry higher interchange rates than standard consumer cards. However, Visa and Mastercard offer significantly reduced interchange rates for B2B transactions that include enhanced transaction data — known as Level 2 and Level 3 data.

What Is Level 2 Data?

Level 2 data includes additional information beyond the standard authorization data. Required fields include: customer code (PO number), tax amount, and tax indicator. Submitting Level 2 data can reduce interchange rates on commercial card transactions by approximately 0.30% to 0.50%.

What Is Level 3 Data?

Level 3 data includes everything in Level 2 plus detailed line-item information: item descriptions, quantities, unit costs, commodity codes, and freight amounts. Level 3 qualification can reduce interchange rates by 0.50% to 1.00% compared to standard commercial card rates.

The Impact on Your Bottom Line

Consider a B2B company processing $200,000 per month in commercial card transactions. Without Level 2/3 optimization, they might pay 2.95% effective rate ($5,900/month). With Level 3 data, the same transactions might qualify at 2.10% effective rate ($4,200/month) — a savings of $1,700 per month or $20,400 per year.

How to Implement Level 2/3 Processing

Implementation requires a payment gateway or virtual terminal that supports enhanced data fields, and your processor must be configured to submit this data to the card networks. Not all processors support Level 3 processing, so this is an important factor when evaluating providers.

Mogil Partners specializes in B2B payment optimization. We help businesses implement Level 2 and Level 3 data processing and negotiate the best rates for commercial card transactions.