Processing Fee Hacks: How to Lower Your Processing Fees with Level 2 & 3 Data Payment processing fees can be a significant cost for businesses, especially those that handle high transaction volumes. While these fees are an unavoidable part of accepting credit card payments, there are ways to lower them—one of the most effective being the use of Level 2 and Level 3 data. By optimizing your payment process with detailed transaction data, you can qualify for lower interchange rates and save thousands of dollars annually.
In this blog, we’ll explore what Level 2 and Level 3 data are, how they work, and how businesses can leverage them to reduce processing fees with CoCard’s advanced solutions.
Processing Fee Hacks: How to Lower Your Processing Fees with Level 2 & 3 Data
What Are Level 2 and Level 3 Data?
Credit card transactions are categorized into three levels: Level 1, Level 2, and Level 3. Each level represents the amount of data provided during a transaction, with higher levels requiring more detailed information.
Level 1 Data
Standard data required for consumer transactions.
Includes basic information such as the merchant name, transaction amount, and date.
Level 2 Data
Designed for business-to-business (B2B) transactions.
Includes additional details like:
Tax amount.
Customer code.
Merchant ZIP code.
Level 3 Data
Specifically for large-scale B2B and business-to-government (B2G) transactions.
Requires the most detailed data, including:
Item descriptions.
Quantities and unit costs.
Tax rates and amounts.
Invoice numbers.
The more detailed the transaction data, the lower the interchange rates, as this reduces the risk for card issuers and payment networks.
How Level 2 and Level 3 Data Lower Processing Fees
Providing Level 2 or Level 3 data helps businesses qualify for lower interchange rates. These rates are discounted because the detailed information reduces the likelihood of chargebacks and fraud, which are common in less detailed transactions.
For example:
A Level 1 transaction might incur a higher interchange fee because it lacks additional verification data.
A Level 3 transaction, on the other hand, provides enough information to assure the card issuer of the transaction’s legitimacy, resulting in reduced fees.
Businesses that regularly process large transactions, such as wholesalers, manufacturers, and government contractors, can see significant savings by incorporating Level 2 and Level 3 data into their payment processes.
Which Businesses Benefit Most from Level 2 and 3 Data?
While all businesses can benefit from reduced fees, those in the following industries often see the most significant impact:
B2B Companies: Manufacturers, distributors, and wholesalers handling large transactions with other businesses.
Professional Services: Law firms, consulting agencies, and accounting firms managing corporate accounts.
Government Vendors: Companies contracting with government agencies that require Level 3 data for compliance.
How CoCard Makes Level 2 & 3 Data Easy
Implementing Level 2 and Level 3 data might seem daunting, but CoCard simplifies the process with cutting-edge technology and seamless integration tools. Here’s how we help:
1. Advanced Payment Systems
CoCard’s payment processing solutions are designed to capture and transmit Level 2 and Level 3 data automatically, ensuring compliance with card issuer requirements.
2. Integration with QuickBooks
Our QuickBooks integration makes it easy to generate detailed invoices and track payments, providing the necessary data fields for Level 2 and 3 transactions.
3. Transparent Reporting
CoCard’s systems provide detailed transaction reporting, allowing you to identify where savings can be maximized through optimized data submission.
4. Dedicated Support
Our team of experts will guide you through the process of implementing Level 2 and Level 3 data, ensuring you reap the benefits of lower processing fees without the hassle.
Steps to Start Using Level 2 and Level 3 Data
1. Upgrade Your Payment Processing System
Work with CoCard to ensure your POS system or virtual terminal is equipped to handle Level 2 and 3 data requirements.
2. Train Your Staff
Educate your team on the importance of collecting and inputting detailed transaction data, especially for B2B and B2G payments.
3. Integrate with Accounting Software
Leverage CoCard’s integrations with platforms like QuickBooks to streamline invoice generation and payment tracking.
4. Monitor and Optimize
Regularly review your processing statements to ensure you’re qualifying for the lowest possible interchange rates.
Unlock Savings with CoCard’s Solutions
Reducing processing fees doesn’t have to be complicated. By leveraging Level 2 and Level 3 data, your business can save significantly while maintaining secure and compliant payment practices. With CoCard’s advanced technology and expert support, implementing these strategies is simple and effective.
Ready to lower your processing fees? Contact CoCard today to learn more about our Level 2 and Level 3 data solutions and how we can help your business save money and thrive. Let us handle the complexity so you can focus on growing your business.
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