CenPOS Level III Processing Certifications

CenPOS, an enterprise level, merchant centric payment processing network, is able to process Level III data through certifications with Paymentech, Vantiv, Moneris Canada, TSYS, and First Data. With Level III processing, CenPOS merchants can process commercial, business, and corporate purchasing cards at the lowest cost.

Level III data processing is especially important for merchants in the business to business environment. The interchange cost associated with business cards can be significantly higher for merchants if the needed data elements are not sent with the card clearing record. The CenPOS processing platform automatically identifies these card types and makes it easy for merchants to include the enhanced data needed; thus, mitigating unnecessary downgrades to non-qualified interchange rates and reducing their card acceptance cost.

CenPOS users have praised the simplicity of providing level 3 data with the CenPOS solution vs competitive payment gateway solutions. Users are automatically prompted for additional information only when needed. With tokens replacing sensitive payment data , and the ability to create and use templates that contain virtually all the extra information, merchants are gaining tremendous efficiencies, improving PCI compliance and reducing the cost of credit card acceptance.

Level III processing brochure

logo cenpos

About CenPOS

“Creating efficiencies through payment innovation”
Founded in 2009, Miami-based CenPOS is a SaaS payment technology provider. 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the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems.

Global Sales: Christine Speedy (954) 942-0483.

Cloud Payment Technology Helps Equipment Distributor Cut Credit Card Costs 50%

A Florida distributor of advanced industrial automation equipment, including SMC pneumatics,  reduced the effective rate of credit card processing to under 2%, including all merchant account and gateway fees. While a small part of the overall revenue stream, it was a growing cost center, impacting profit margins.

How did the distributor reduce costs? Two changes  were required. First a change in the credit card processing price plan, and second technology to automate qualified interchange rate optimization. Interchange rates include a percentage of the transaction and a per transaction fee, and comprise the bulk of all credit card processing costs. The same card can process at different rates, depending on which rules the merchant complies with.

The example business was using Bank of America First Data Merchant Services with an enhanced bill-back price plan. Most credit cards accepted were and are corporate, business, or purchasing cards. All transactions are card not present, also known as card absent, and some are international transactions. On the existing price plan, the merchant paid a flat rate percent of sales for all qualified transactions, plus an additional percentage fee for non-qualified sales. The non-qualified penalty was very high, resulting in an effective rate over 4%. (Total fees divided by net sales, minus American Express, equals effective rate.)

The best price plan for merchants, commonly available for $1,000,000 in annual processing, is called wholesale interchange plus or interchange pass through. With pass-through pricing, merchants pay all costs, plus a merchant discount, which is identified as a separate line item for billing. Costs and gross profits to the merchant service provider become transparent. Even better is for the merchant account to support level 3 processing, whereby a merchant that sends enhanced level 3 data may qualify for even lower rates on business, corporate and purchasing cards.

A Bank of America representative offered the merchant an additional agreement for a new interchange plus merchant account solely for their largest corporate customer. I recommended the merchant either renegotiate all of their business with my input or go with another vendor. It made no financial sense that the merchant solve the cost concern for only one client and not all of them. To reduce credit card processing fees, first the merchant needed a new interchange plus merchant account for all customers.

Interchange is the largest component of credit card processing fees. There are many rules to achieving the lowest qualified interchange rate. For business to business companies, it’s infinitely more difficult to qualify for the lowest rate for any given card type  due to the high prevalence of business, corporate and purchasing cards, and their many rules. Because it’s virtually impossible for employees to learn all the nuances of those rules, as well as even know what kind of cards their remote customers are presenting, cloud payment technology is the break-through that merchants have needed to achieve lower effective costs while also increasing efficiencies.

The three most challenging rules merchants have trouble complying with for business, corporate and purchasing cards:

  • authorization and settlement within 72 hours for all card not present sales
  • authorization amount and settlement amount equal
  • sending correct level 3 data, enhanced data that applies only to certain cards

Without all three of the rules met, fees can run one percent or more extra vs. when all rules were complied with. The merchant needed software that would help them meet all requirements, yet there are few market choices, including among cloud payment / virtual terminal solutions.

Bank of America offered a reasonably priced desktop software solution that would support level 3 processing. The reason it was presented to use for one customer only, is because all the information needed to be sent with each transaction creates an extra burden for accounts receivable. If the merchant used it for all customers, then they’d have to enter a lot of extra information on every sale to be safe, because users would have no idea whether the card would benefit from level 3 data or not.  Additionally, the one customer was on 30 day terms, so at the time the invoices were paid, the other criteria would be met. But that wasn’t true for new and other customers who were not on terms. An authorization was obtained for those customers on order, and weeks later, the final amount would often be different. This meant the merchant would not meet all three minimum rules for the other accounts to qualify for the best rates.

I recommended the merchant implement CenPOS, an intelligent rules-based cloud payment technology that mitigates risk of employees making decisions that impacted fees paid. It automatically determines when level 3 data is required for the lowest qualified rate. Additionally, it automatically forces proper settlement rules are complied with, including authorization.

Compared to the Bank of America First Data solution, my recommendation solved these problems:

  • Increased access: Anyone authorized can process transactions via the virtual terminal because it’s in the cloud, not desktop software.
  • Lower fees: All transactions optimized for lowest qualified interchange rate, not just one customer
  • Eliminate mistakes: Intelligent rules-based solution forces proper employee actions to mitigate risk and reduce fees
  • PCI Compliance: stored tokens replaced full card data- no employee access to card data. PCI compliant custom credit card authorization forms automatically generated for customer signature.
  • Operational Efficiencies:  Quick and easy to charge repeat customer accounts using stored tokens. One reporting hub to retrieve all payments, including resending receipts to merchants. Custom Level 3 data template(s) significantly reduce burden of adding level 3 data when prompted.

The merchant chose to open a new interchange plus merchant account as well as implement CenPOS.  Within 30 days, the merchant  streamlined payment processing and reduced card acceptance costs over 50%, as evidenced by comparing before and after merchant statements. Additionally, PCI compliance burden and financial risks were reduced, providing peace of mind for the family business owners.

Example of a wew low interchange rate a merchant transaction qualified for.

Above: Example of a new low interchange rate a transaction qualified for vs 3.77% on the old solution.

ARTICLE DISCLAIMER: The details of the third party offer are based on my recollection of verbal statements by the merchant. It’s possible not all information was shared with me, or that my recollection is imperfect. Before making any financial decisions for your company, speak with a qualified representative familiar with the nuances of business to business interchange rules and PCI compliance rules.

Did you like this article? Please give it a thumbs up / like it, review or share it.




Question on MasterCard rate COML LARGE TICKET 2 FLEET

Q&A with author Christine Speedy. This response is related to an excerpt from yesterdays enewsletter:

Subject: Business to business credit card rate reduction. Sending level 3 data can reduce interchange fees over 1%. Not all processors support level 3, and even if yours does, you may not qualify for them. Validate if you’re getting level 3 on your merchant statement with these examples:

  • NONQUALIFIED: corp data rate 1, corp data rate 2, bus std, EIRF.
  • BEST QUALIFIED: corp prd 3, EVPSCRPDATAR3, Commercial Data Rate 3

If not , it could be your processor, your price plan, your merchant account set up, or the terminal you’re using that is the cause. Contact your representative to find out which. Contact me if you want technology, not people, to manage how transactions qualify.
CenPOS has supported level 3 data for retail and key entered. NEW, CenPOS supports level 3 for customer initiated payments on our hosted pay pages, including electronic bill presentment and payment (EBPP). Call for help to take advantage of this service (no extra fee).

Customer Question: We have a customer who uses a level III card to pay multiple invoices at once. This charge is always relatively large, and we’ve noticed it’s categorized under the MasterCard section – “COML LARGE TICKET 2 FLEET”. Would you know what this category is, and if it is associated with level III at all?

Answer: Below is screenshot of  page 93 from the MasterCard U.S. and Interregional Interchange Rates and Criteria, effective as of October 2012. (That’s the most recent from  MasterCard.)

mastercard commercial large ticket 2

For the card presented, the interchange fees are the same for both large ticket sales. Large ticket 3 requires $100,000 sale minimum. The sale was between $25,000 an $99,999.99, thus the transaction qualified at the proper category. If the sale was $100,000 or more, then it would not be the lowest qualified interchange category. Since the rate is the same, there is no financial difference, however,  MasterCard could change the rates, so it’s important to always qualify for the right interchange bucket.