What is MasterCard new Business Level 3 and Level 4 interchange program?

I was confused enough by wording in a recent email newsletter regarding July 2013 interchange updates that I wanted to share an explanation regarding Small Business Spend Processing and the impact on merchants, not to be confused with Level 3 data and level 3 processing.

Here’s an excerpt of the email. The key July changes include:

  • MasterCard will introduce new Business Level 3 and Level 4 interchange programs to support the new Small Business Spend Processing program.

Interchange is the main component of merchant credit card processing fees. Each credit card issued (card type) has multiple rates associated with it, with the best rate, or qualified interchange rate, achieved only by meeting all the criteria required. Merchants can influence which of the typical 3-4 rates associated with each given card type their transactions qualify for.

For business, corporate, and purchasing cards, the criteria for the lowest qualified rates includes providing enhanced data, also known as level 3 data. This is not to be confused with the new Business level 3 and 4 interchange rates, which are dependent on how much the cardholder spends.

Transactions on Business cards that participate in Small Business Spend Processing will qualify for programs based on annual cardholder spend, reviewed quarterly. Spend amounts are reviewed quarterly and updated annually.

  • $25,000-49,999 = Business level 2
  • $50,000-99,999 = Business level 3
  • $100,000+ = Business level 4

Merchants do not need to do anything to qualify for the new interchange rates. It’s business as usual.

Example: A participating small business paying with MasterCard Elite Worldcard could result in these interchange rates for a merchant, plus $.10 per transaction:

  • Business level 3, World Elite Data Rate I, 2.86%
  • Business level 3, World Elite Data Rate II, 2.16%
  • Business level 3, World Data Elite Rate III, 1.96%
  • Business level 4, World Data Elite Rate III, 2.06%

3 critical elements to qualify for Data Rate III are:

  1. sending level 3  enhanced data
  2. authorization and settlement amount are equal
  3. transaction is settled within required timeframe, usually 72 hours from the initial authorization

A lot of business to business companies don’t have transactions that meet all three criteria, so even though they’re set up for level 3 processing for credit cards , the transactions don’t all qualify.*

DISCLAIMER: The information in this article was scoured from the internet and may contain forward information subject to change, or erroneous data. Conceptually it’s accurate, however, specific numbers and rates may not be.

* Contact us for solutions to the level III qualification problem.

MasterCard Interchange updates October 2012- prepaid rates rise

Interchange updates are typically twice per year and the Fall release is now in effect. MasterCard debit and prepaid have shared the same interchange rates until now.  They’re now separated. Prepaid rates are up, as is their use by consumers. Prepaid card use rose by about 18 percent in 2011 as consumers dropped traditional banking products such as checking accounts with higher fees, according to a study by Pleasanton, California-based Javelin Strategy & Research, a market-research firm.


Current Interchange

October 2012

Consumer Key-Entered Debit

1.64% + $.16

1.60% + $.15

Consumer Merit 1 Debit

1.64% + $.16

1.60% + $.15

Consumer Key-Entered Pre-Paid

1.64% + $.16

1.76% + $0.20

Consumer Merit 1 Pre-Paid

1.64% + $.16

1.76% + $0.2

Pre-paid cards are costly for consumers to use and now they are getting more costly for merchants to accept. This is in response to lower regulated debit fees, which are capped at .05% and $.20 per transaction.

We maintain links to the most current interchange rates here.

Rochester NY Lumber Retailer adopts payment technology

Matthews & Fields Lumber Company, established in 1896, selected the CenPOS payment processing platform after an exhaustive search and analysis of technology and credit card processing solutions. Like others in the industy, Matthews & Fields has a large base of customers on account, as well as walk-in traffic. CenPOS solves one of the most fundamental problems with wholesale companies- interchange qualification.

Interchange is the largest component of all merchants credit card processing fees. A common problems for wholesale companies like Matthews & Fields is that phone orders and retail orders have different requirements to qualify for the best interchange rates and the rules are complex. CenPOS technology automatically optimizes every type of transaction for the best qualified rate, including routing transactions with the appropriate RETAIL  or MOTO (card not present) indicator within a single merchant account.

About CenPOS: “Creating efficiencies through payment innovation”
CenPOS is an intelligent payment processing network that streamlines the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems. CenPOS offers many benefits to merchants who want to influence credit card processing fees and mitigate risk of internal and external fraud. CenPOS is processor neutral and compatible with most major credit card processing companies.

Blog Media contact: Christine Speedy 954-942-0483


  • CenPOS is sold through limited authorized resellers and agents.
  • Keep your existing merchant account.
  • Contact Christine for CenPOS for your business and for reseller opportunities.