Level 3 Data: What It Is and How to Qualify for Level III Credit Card Processing

By Jasmine Glasheen

An advantage being in business for a few years is that you get clued into ways to save money that you had no way of knowing about when you first got started. Level 3 credit card processing is one of those under-the-radar money savers, but there’s no reason to wait until you’re an industry veteran to start saving money with Level 3 processing.

At this point, you’re probably wondering what level 3 credit card processing actually is and whether it’s as complicated as it sounds, so let’s define the term before we go into further detail.

What is Level 3 data?

Level 3 credit card processing enables B2B businesses to save a substantial amount of money on credit card processing by giving their credit card companies –like Visa or Mastercard– more information than they would give these companies to process traditional (level 1 or 2) transactions. Credit card transactions can fall into 3 different data levels (Level 1, Level 2, and Level 3) and each level requires a certain amount of information to qualify its transactions. The higher the level is, the more details it requires. However, the higher the data level, the less it costs merchants to process transactions.

So, if you do business with large companies or government agencies, it may be worth it to do the research to find out if level 3 data processing is an option for you.

Data Processing Levels

If terminology like “data processing levels” sounds like a foreign language to you, know that you’re not alone. Here’s a quick breakdown of each data level, as well as what the data you need to provide for your credit card company to qualify for each tier.

Level 1: All B2B transactions must qualify for a minimum of Level 1 data processing. Luckily, the data you need to provide to qualify for Level 1 processing is limited to:

  • the merchant’s name
  • the transaction amount
  • the date on which the transaction took place.

Level 2: This level is perfect if you deal with small to mid-sized businesses. The data you need to provide to qualify for Level 2 processing is a bit more extensive. You will need to provide your credit card company with:

  • all level 1 data requirements
  • the customer code
  • the total tax amount.

Level 3: Level 3 data processing is ideal for companies that do business with large corporations or government entities––in fact, this tier of payment processing was originally created to prevent branches of the government from overspending.

To qualify for Level 3 you need to provide:

  • all of the data necessary for Level 1 and Level 2
  • the postal code your company is shipping from
  • the postal code your company is shipping to
  • the invoice number
  • the order number
  • the freight amount
  • the line item details of the purchase.

To achieve level 3 data processing, you need to access and report a lot more data than when processing Level 1 or Level 2 transactions. Yet since higher data levels have lower interchange rates, it is worth your time to learn to qualify for Level 3 processing–– especially if your company does a lot of B2B transactions with large syndicates, or if you aspire to start doing business with the big guys, many of which only use Level 3 cards for major purchases.

Top Providers’ Level 3 Offerings

All credit card providers are not created equally, and each provider has a unique cost/benefit value proposition. Let’s take a look at what 4 of the top credit cards companies – Visa, Mastercard, American Express, and Discover – require from merchants to process Level 3 transactions.  

Visa Level 3 Data

To qualify for Level 3 processing with Visa, your business needs to process 20,000 to 1 million e-commerce transactions with Visa annually. Visa requires that you submit an Attestation of Compliance (AOC) form and a Self-Assessment Questionnaire (SAQ) annually, as well as a quarterly network scan by an Approved Scan Vendor (ASV). Visa has lower interchange rates for Level 3 data. Find out more.

Mastercard Level 3 Data

Mastercard requires businesses to have between 20,000 and 1 million combined Mastercard/Maestro transactions annually, or to meet Level 3 qualifications for Visa. Mastercard also requires an annual self-assessment, an online assessment, and a quarterly network scan conducted by an Approved Scan Vendor (ASV). Mastercard provides lower interchange rates for Level 3 data. Find out more.

American Express Level 3 Data: American Express does not offer Level 3 data processing.

Discover Level 3 Data: Discover does not offer Level 3 data processing.

Preparing Your Business for Level 3 Processing

Lower interchange costs are the most obvious reason to strive to qualify for Level 3 processing, but they aren’t the only benefit. Level 3 processing can give you more control over your business by tracking things like the size of each purchase, who is allowed to process transactions and how often your card can be used, as well as notifying you of any changes or suspicious-looking transactions.

Level 3 transactions are also processed faster, meaning there’s less of a time delay between when you make a sale and when you get paid–– this can be a major incentive for businesses that don’t have a lot of excess revenue floating around.

However, extra data isn’t the only thing you need in order to qualify your businesses for Level 3 processing. You also need a payment gateway to authorize online transactions, as well as a card that’s actually eligible for Level 3 data processing.

If you need to acquire a payment gateway, the cool thing is that payment gateways like Payment Depot partner PayTrace actually fill in the data that’s necessary for you to get Level 2 and Level 3 processing rates on business cards, so you can get all of the savings of high-level processing without having to engage in the tedium of manually filling in data.

If you still aren’t sure if your transactions would qualify for Level 3 processing rates, or you want to learn additional ways your business can save money on payment processing, sign up for a free analysis from Payment Depot to learn how you can start saving money on interchange fees today!