Level 3 Gateway

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Level 3 payment processing requires a level 3 gateway, but most merchants don’t realize how big an impact gateway selection has on merchant fees paid.

Merchants selling to other businesses or the government benefit from Level 3 processing and the savings this provides on commercial, purchasing and government transactions by processing level 3 Data. What gateway companies won’t tell you, is that not only do you need to send special data, but there are a bunch of rules to qualify for Data Rate III interchange rates as shown in the image below. Don’t follow the rules, and you’ll pay Data Rate I or Standard.

level 3 interchange ratesWhat are the rules? For starters, there are additional fields that must be submitted with the transaction. All the level 3 gateways support submitting the data, though they may do it in different ways. There are other rules such as the authorization and settlement amount must match. It’s unrealistic to expect any user to know all the rules for any transaction to qualify at the lowest interchange rate, so a payment gateway that automates that process is critical. This is where most payment gateways fail. They can submit data, but have no intelligence to help merchants comply with qualification rules.

What gateway supports level 3 for retail, kiosk, mobile or any swiped transaction? CenPOS.

Gateways must certify level 3 to each acquirer, also known as payment processor, or credit card processor. The certifications can include for retail, retail EMV, MOTO (Mail Order Telephone Order), and ecommerce. Very few gateways certify level 3 for all sales channels. The only one I’m aware of that’s certified retail and retail EMV is CenPOS.

Gateways supporting level 3 for MOTO:

What level 3 gateway is compatible with First Data? CenPOS, First Data Global Gateway e4 – now called Payeezy. While CenPOS automates level III processing, First Data has multiple optional steps after the sale, leaving compliance up to the individual user; additionally, their method does not guarantee that all rules will be met to qualify for level III interchange rates. Authorize.net and Payflow Pro offer level III with certain API’s only.

What level 3 gateway is compatible with Vantiv or NPC? CenPOS

What level 3 gateway is compatible with Chase Paymentech? CenPOS, Paymentech Orbital, PayTrace. Paymentech and Paytrace have optional extra steps, leaving compliance up to the individual user; additionally, their methods do not guarantee that all rules will be met to qualify for level III interchange rates. Authorize.net and Payflow Pro offer level III with certain API’s only.

What level 3 gateway is compatible with Tsys? CenPOS, eProcessing Network, Authorize.net and Payflow Pro offer level III with certain API’s only

What level 3 gateway is compatible with Moneris? CenPOS

What about Revolution Payments, Vantage Card Services and other gateways not listed here? In most cases, the company is a reseller of a gateway listed above, not a gateway manufacturer. Network Merchants, LLC (NMI) distributes a white label solution that supports level 3 data, but there’s no public information about acquirer certification; BluePay and 3DSI also offer level 3, but it’s unclear what acquirers. Please add your suggestions in comments.

As of September 15, 2015, of the brands listed in this post, only CenPOS has both certified EMV terminals to accept chip cards with their gateway, and has also certified level 3 processing for all sales channels via any method, including API, virtual terminal, and online payments.

 

 

EMV handbook for merchants by Verifone

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emv guide verifone merchant terminalVerifone’s EMV handbook is a comprehensive guide for both retail and card not present merchants. It’s hardware agnostic and the Question and Answer section is especially useful.

Two questions on page 17 about hardware need to be read together. To clarify the liability shift going into effect October 1, the merchant’s hardware (terminal) needs to be more than capable of processing chip card transactions.  It needs to be certified on the processor platform and EMV must be enabled on the merchant account. This is an important distinction.

There may be thousands of terminals in use technically capable of accepting chip cards, but either the terminal is not yet certified for EMV chip card transactions, or the processor has not certified the terminal to their platform.

Beware purchasing terminals that will ‘get you ready’ to be EMV compliant. Will the seller guarantee the terminal will be certified for the acquirer platform you need? For example, acquirers usually have multiple platforms but not all merchants can switch between them. With the liability shift just weeks away, merchants wanting to be EMV compliant should not wait another minute:

  • Buy only EMV certified terminals acquirer confirms can be enabled.
  • Verify firmware and or software is current before buying
  • Request an EMV TID from acquirer
  • Download file, usually required for countertop terminals
  • Install new software driver, if applicable, for virtual terminals

Christine Speedy – Thanks for reading! If your business needs EMV certified terminals or Card Not Present risk mitigation solutions today, contact me at 954-942-0483 or 3Dmerchant.com/contact. I specialize in business to business and mid-market payment solutions.

Need an EMV terminal? The problem with desktop terminals for mixed retail & card not present

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For mixed retail and card not present merchants, especially with a business to business customer component, a traditional desktop terminal can cause problems including failed PCI compliance, higher merchant fees, and increased losses from customer disputes  – the dreaded chargeback. To comply with EMV, now is the time to address multiple business needs to maximize profits.

Why is a traditional desktop terminal bad for mixed customer base?

Verifone VX520 VX805 EMV terminal

Verifone VX520 with VX805 EMV terminal

  1. Merchants have retail merchant accounts with their swiped terminal. When a transaction is key entered, it’s automatically qualifies for the worst non-qualified rate for the card type, because expected magnetic stripe data is not received.
  2. Key entered or card not present (CNP or MOTO/ mail order telephone order) transactions require additional data to protect against fraud losses. Users can bypass prompts if asked, but more importantly, the transaction is still presented as RETAIL, so retail rules apply for responding to disputes.
  3. Internal paperwork such as credit card authorization forms are PCI compliance nightmares and often don’t meet requirements to win disputes.
  4. For any business with a commercial account aspect, there is NO desktop terminal capable of qualifying merchants for the lowest fees, available only by supplying level III data.

What’s the alternative to a desktop terminal?

verifone MX915 EMV terminal

Verifone MX915 multilane signature capture terminal

Desktop software like PCCharge and ICVerify have all announced end of life because they cannot support new payment technologies like EMV. The swiper wedge that many small businesses have used do not support EMV and that won’t be changing, so they too will disappear. The alternative is a payment gateway with virtual terminal; a cloud based solution. Buyer beware. There are significant differences between gateways; many of them are not much better than a desktop terminal.

Virtual Terminal with EMV Buyer Tips:

  • Choose an agnostic gateway. That way if you want to change processors in the future, it’s not disruptive to operations.
  • Verify the gateway has an EMV certified terminal for your processor today. For example, First Data publishes their list of certified solutions here: First Data Integrated Partner Solutions Certified Listing.
  • Beware language such as, ‘EMV ready’ for both gateway and desktop solutions. EMV certified terminal is not the same as a certified solution that can be EMV enabled today with your processor.
  • Ask if the gateway supports level 3 processing for retail.
  • If the gateway cannot dynamically change transaction representment from retail to MOTO – and virtually none do- key entered transactions have the same risk as a desktop terminal.

What about mobile? Mobile EMV will largely be rolled out next year, as hardware needs to first be certified, and then all the other certification components will follow.

The only payment solution today that is supports level 3 processing for retail is CenPOS, which also has the most EMV terminal certifications of any gateways to date.

CenPOS is a merchant-centric, end-to-end payments engine that drives enterprise-class solutions for businesses, saving them time and money, while improving their customer engagement. CenPOS’ secure, cloud-based solution optimizes acceptance for all payment types across multiple channels without disrupting the merchant’s banking relationships. CenPOS is available globally. For additional information, contact Christine Speedy, 954-942-0483.

Vantiv US EMV certified terminal solutions

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Which US EMV certified terminals can be used with Vantiv today? Merchants have two choices, countertop terminal or multilane terminal. The latter is available only with CenPOS, a merchant centric end to end payment engine. On October 1, 2015, retail merchants that don’t support chip cards will be liable for counterfeit credit card fraud.

Vantiv announced a partnership with Ingenico in 2013, to distribute Ingenico EMV ready terminals. While Vantiv did not specifically state which terminals would be certified, the official PR from Ingenico includes, “The portfolio of Ingenico EMV certified devices includes iCT220 & iCT250 countertop terminals, and iWL220 wireless terminal.”

ict250 ingenico emv terminal

iCT250 ingenico emv terminal

To enable EMV at the merchant level, the following steps are needed:

  • Acquirer completes requirements to process EMV
  • Hardware (each terminal) certified to accept EMV
  • Hardware certified to acquirer
  • Gateway certifies hardware to acquirer (if applicable; required for all multi-lane terminals and integrated solutions)
  • Merchant account enabled for EMV

In May 2015, Vantiv announced, “Ingenico Group Adds Vantiv’s EMV-certified Application to Smart Terminals for Small- and Medium-sized Businesses“. Because every terminal is to individually certified, it’s unclear which terminals have been certified to date since they’re not specified, but the iCT250 is definitely on the list.

With CenPOS, Vantiv merchants can also use the Verifone MX 915, a multilane, signature capture terminal, and enable EMV immediately. To process transactions, merchants use a virtual terminal with a web browser and high speed internet, or optional integrated solution. Additional multi-lane terminal options will be available in the future, including the Ingenico ISC250.

verifone MX915 EMV terminal

Verifone MX915 multilane signature capture terminal

CenPOS is a merchant-centric, end-to-end payments engine that drives enterprise-class solutions for businesses, saving them time and money, while improving their customer engagement. CenPOS’ secure, cloud-based solution optimizes acceptance for all payment types across multiple channels without disrupting the merchant’s banking relationships. CenPOS is available globally. For additional information, contact Christine Speedy, 954-942-0483.

Authorize.net and level 3 processing for business to business

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The Authorize.net virtual terminal is expensive for business to business merchants, even though rates seem cheap. That’s because Authorize.net ® only supports level III data for certain integrated solutions, leaving B2B companies out of luck qualifying for the lowest interchange rates for corporate, business and purchasing cards.

Authorize.net Payment Gateway Rates

  • $49 set up
  • $25 /month
  • $.10 per transaction
  • $.10 daily batch
  • Additional services which used to be extra, are now free: Automated Recurring Billing, Advanced Fraud Detection Suite TM, Customer Information Manager (subscription management).

level 3 interchange ratesNot shown above: Data Rate III large ticket ($10,000 minimum) Level 1 rate is 1.20% and $40, up to Level 4, 1.51% and $40. MasterCard Cardholder Spending Requirements for Small Business Products: Business Level 1 – $0 to $24,999; Business Level 2 – $25,000 to $49,999; Business Level 3 – $50,000 to $99,999; Business Level 4 – $100,000 and greater.

The table below shows different rates possible for the same transaction. Using the Authorize.net virtual terminal, the best rate possible for a Level 1 Business card is usually 2.65%. While the Authorize.net virtual terminal supports Level II Data, to qualify for the Level II rate, it requires a valid sales tax amount, tax indicator and valid tax id. Sales tax must be between 0.1% and 30%. If tax exempt ($0 entered as tax amount or blank) will clear at Commercial Data Rate I. Most business to business companies do not have a sales tax amount.

The examples below include the interchange fees above and the payment gateway transaction fees for Authorize.net qualifying transactions at Data Rate I and CenPOS qualifying transactions at Data Rate III (also known as Data Rate 1 and Data Rate 3)

Authorize.net vs CenPOS payment gateway example for Level 1 card

$5,000 sale, Authorize.net cost is $148.10 vs $108.20 CenPOS.*
$25,000 sale, Authorize.net cost is $662.60 vs $365.20 CenPOS.*

Authorize.net vs CenPOS payment gateway example for Level 4 card

$5,000 sale, Authorize.net cost is $132.60 vs $92.70 CenPOS.* CenPOS saves merchant 27%.
$25,000 sale, Authorize.net cost is $740.10 vs $442.70 CenPOS. CenPOS saves merchant 40%.

How does CenPOS help merchants qualify transactions for level 3 rates? There are multiple requirements to qualify for the level 3 rates. These include submitting level 3 data, valid authorization, and authorization and settlement amount must match, among others. CenPOS automates interchange management in compliance with card acceptance rules, making it light and easy for users to comply, while also removing employee decision making that can impact the cost of card acceptance.

CenPOS customers achieve similar results across all sales channels, including retail. CenPOS is compatible with all the major processors, so merchants do not need to change their financial partners. No special software is required; users can access via a secure web page, mobile device, or integrated solution. Contact CenPOS Authorized Reseller Christine Speedy today for a demo and free trial.