Level III processing refers to the type of data sent with a credit card transaction to qualify for specific interchange rates such as Visa Commercial Level III or MasterCard Commercial Data Rate III. It has the most data requirements, and is only applicable for certain cards. Interchange is a fee associated with accepting credit and debit cards, typically a percent of the transaction amount, plus a per item fee. Providing level 3 data can save companies over 1% in interchange fees by qualifying a transaction for a lower interchange rate.
Which cards are level 3 eligible?
Corporate and Purchasing cards. This includes types called Business Enhanced, Signature Business, Corporate, Purchasing Cards, and GSA Purchasing cards. Merchants have no way of knowing which card a customer is giving them in a card not present environment.
What data is required to qualify a transaction for level 3 interchange rates?
Level II Level I data elements: **Sales tax amount Sales tax indicator, Customer code, Purchase ID, Purchase ID format Level III – Summary Data Level I and II data elements plus:
- Ship to/from ZIP code
- Destination country code
- VAT invoice reference number
- VAT tax amount/rate
- Discount amountFreight/shipping amountDuty amount
- Order date
Level III – Line Item Detail Level I and II data elements plus
- Item description
- Item quantity
- Item unit of measure
- Item total
- Item commodity code
- Item product code
- Item unit cost
- Item VAT tax amount/rate
* Source: Visa enhanced data http://usa.visa.com/corporate/corporate_solutions/im/enhanced_data.html
** Level 1 information is the basic information needed to complete any credit or debit card transaction. This includes the cardholder name, card number, expiration date, merchant name, transaction amount, date.
Are there any other requirements to qualify for level 3? Yes.
- The merchant must have merchant account with a processor that supports level III data. Processors often have multiple platforms and not all their platforms support level III data.
- The merchant must also have a qualified MCC code, the business type that goes on the merchant application. For example, manufacturers, distributors and automotive new car dealers and parts retailers have qualifying MCC codes.
- The merchant needs a system to submit level III data. The two common types are desktop software and payment gateways.
- The authorization and settlement amount must be equal.
- The settlement must occur within the required time. 24 hours for retail and 72 hours for MOTO (mail order, telephone order) and ecommerce.